Qualcomm, VeriSign, Amgen advance

The NASDAQ Composite Index rose for a third day on Friday after Qualcomm Inc said quarterly profit will meet forecasts and VeriSign Inc boosted its estimate for the quarter and year.

Amgen Inc gained after the company said a delay in US approval of its anemia drug Aranesp won't hurt earnings. JDS Uniphase Corp fell after the company reported the largest annual loss in US history, limiting the NASDAQ's climb.

Some investors expect stocks to rally as the economy rebounds from its slowest growth in eight years, sparked by the Federal Reserve's six interest-rate reductions this year.

"The prospect of recovery later this year is kind of washing away the fear of weak earnings," said Edmund Cowart, who helps manage US$6 billion at Eagle Asset Management in St. Petersburg, Florida, and has been buying shares of energy companies including El Paso Corp.

The NASDAQ gained 6.11, or 0.3 percent, to 2,029.07. The Standard & Poor's 500 Index climbed 2.89, or 0.2 percent, to 1,205.82 as General Electric Co advanced. The Dow Jones Industrial Average fell 38.96, or 0.4 percent, to 10,416.67, led by International Business Machines Corp and Microsoft Corp.

For the week, the NASDAQ fell less than 0.1 percent, the S&P 500 lost 0.4 percent and the Dow dropped 1.5 percent. Year-to-date, the NASDAQ has lost 18 percent, the S&P 500 8.7 percent and the Dow 3.4 percent.

Some investors say earnings forecasts and stock prices are still too high after a report showed the economy growing at an annual rate of less than 2 percent for a fourth-straight quarter.

That hasn't happened since the recession in 1990-1991.

Gross domestic product grew at a 0.7 percent annual rate in the quarter, according to the Commerce Department. That's the slowest in eight years.

The slowing economy is "likely to keep people concerned about earnings in the current quarter and the outlook for the quarters ahead," said Thomas Van Leuven, a strategist at JP Morgan Securities Inc. "There could be some re-evaluations of earnings estimates for coming quarters and a lid on stock prices." With 78 percent of the S&P 500 having reported second-quarter results, earnings are expected to decline 17.2 percent in the period, according to First Call/Thomson Financial.

Analysts forecast S&P 500 profits will fall 11.5 percent in the third quarter and rise 0.9 percent in the fourth quarter, First Call said. The fourth-quarter profit growth estimate has dropped from 5.5 percent as of July 1 and 12.6 percent on April 1.

Profit is expected to grow 20 percent in 2002.

Stocks aren't sliding on the GDP report because investors are looking ahead to the expected recovery, some analysts say.

"We have had earnings reports that were terrible," Kevin Logan, chief market economist at Dresdner Kleinwort Wasserstein, said before the GDP report. "People know the second quarter was a washout."

Six stocks rose for every five that fell on the New York Stock Exchange, while eight advanced for every seven that declined on the NASDAQ Stock Market. About 1 billion shares traded on the Big Board, 12 percent below the three-month daily average.

Qualcomm, a licenser of patents for mobile phones, surged US$3.52 to US$63.18. In addition to saying earnings will meet estimates, the company reported profit last quarter that was in line with forecasts.

VeriSign gained US$6.93 to US$54.10. The computer-security software maker reported second-quarter sales more than tripled and profit, excluding certain costs, topped analysts' estimates.