NEW YORK, (Reuters):
TECHNOLOGY STOCKS edged higher yesterday, aided by a bullish investment call on chip heavyweight Intel Corp., but blue chips sagged as investors took a cautious stance before key earnings and economic data later this week.
Aluminium maker and Dow component Alcoa Inc. will kick off the quarterly earnings season with its results today. On the economics front, investors will get a report on weekly initial jobless claims today, followed by the closely watched nonfarm payrolls data for December, tomorrow.
"Investors are assessing where the most growth is, and continue to buy Nasdaq stocks," said Cary Nordan, vice president and equity analyst at BB&T Asset Management in Raleigh.
"You're going to see volume pull back as we wait for more economic data later this week and earnings announcements next week. I'd expect it to be fairly quiet over the next few days until we get the job report on Friday," Nordan said.
The Dow Jones industrial average eased 49 points, or 0.46 per cent, to 10,490. The Standard & Poor's 500 Index was off 2 points, or 0.19 per cent, at 1,122. The technology-laced Nasdaq Composite Index tacked on 12 points, or 0.56 per cent, to 2,069.
BROADER MARKET
Weakness in big oil and gas companies' stocks weighed on the broader market, as some investors sold their shares to lock in recent gains amid concerns that energy prices could start to retreat from current high levels. The S&P integrated oil and gas companies index dropped 1.2 per cent.
Wall Street is growing more confident about the economy's resurgence and improved corporate profits in the upcoming earnings season. But some analysts have begun voicing concerns that stock prices are close to being fully valued after last year's steep rally. The market's major indexes raked in double-digit percentage gains in 2003, and got off to a firm start in 2004.
Intel, the world's largest maker of computer chips, rose $1.01, or 3.1 per cent. to $33.91 and was the blue-chip Dow's biggest percentage gainer. Bernstein Research raised its investment rating on the technology bellwether to "outperform" from "market perform."
But Alcoa was among the Dow's biggest percentage losers, falling 42 cents or 1.09 percent to US$38.07, a day before it releases earnings. On Tuesday, Alcoa said it will pay about US$32 million to buy additional shares of the Aluminum Corp. of China Ltd., also known as Chalco, as part of Chalco's new share placement.
Nortel Networks Corp. topped the New York Stock Exchange's most active list, gaining 93 cents, or 19.5 percent, to US$5.69. Nortel recently cut a deal with Cable& Wireless Jamaica to boost its GSM network.
The company struck a deal to supply Verizon Communications, the No. 1 U.S. phone company, with next-generation Voice Over Internet Protocol (VoIP) technology. Nortel's stock also got a boost after UBS Investment Research upgraded its rating on the company.
Darden Restaurants Inc. was among the New York Stock Exchange's biggest percentage losers, a day after the company announced the resignation of an executive who headed its struggling Red Lobster chain.
Shares of Darden fell 8.8 percent, or US$1.84, to US$19.04.
Investment bank J.P. Morgan cut its rating on Darden to "underweight" from "overweight."
