Print

Mail

wiki links

Qualcomm, VeriSign, Amgen advance

Major indexes * 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. * The Dow Jones Industrial Average fell 38.96, or 0.4 percent, to 10,416.67.

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.

Amgen advanced US$3.10 to US$60.82. Amgen also reported second-quarter earnings that rose more than expected.

The GDP report boosted expectations that the Fed will lower interest rates another half-point this year. That lifted financial stocks such as JP Morgan Chase & Co., which gained 97 cents to US$44.21. General Electric, whose GE Capital unit is the largest non-bank finance company, rose US$0.90 to US$44.65.

JDS Uniphase, the biggest marker of fiber-optic parts, declined US$0.92, or 9.7 percent, to US$8.55, and was the most active stock with 67.25 million shares changing hands.

The company restated fiscal third-quarter results to write down US$38.7 billion in acquisitions, bringing the full-year loss to US$50.6 billion. No US company has lost more in a year.

JDS Uniphase also said it will fall short of last month's forecast of US$450 million in fiscal first-quarter sales and declined to provide more specific estimates for its results.

Among the most widely held stocks, Microsoft dropped US$1.12 to US$65.47, General Motors Corp fell US$1 to US$62.90 and IBM declined US$1.30 to US$104.70.

Columbia Sportswear Co plummeted US$9.04 to US$35.96. The sportswear retailer said that it anticipates spring 2002 order growth in the high single digit to low double-digit range, below its historic rate.

Campbell Soup Co dropped US$0.75 to US$27.01. The largest soupmaker cut its dividend and earnings estimates for fiscal 2002 because it increased spending on marketing and new-product development and lowered soup prices to reverse slumping sales.

Tricon Global Restaurants Inc fell US$1.20 to US$43.50. The owner of the Pizza Hut, KFC and Taco Bell chains said fiscal third-quarter earnings may be less than forecast as sales slow. Still, Tricon expects full-year profit of US$3.18 a share, US$0.03 above estimates.

Corvis Corp rose US$0.56 to US$3.83 after the maker of fiber-optic equipment said it reached agreement to sell optical networking products to Telefonica SA.
This story has been viewed 1948 times.