A day after jittery investors dumped shares in droves, Wall Street was struggling to hold steady Wednesday. The jitters are still very much in evidence, but investors are no longer pressing the panic button at the first sign of trouble.
Earnings concerns continue to be cited as the chief culprit in boosting the market's anxiety level, although you'd think traders would be resigned to the notion that the double-digit revenue growth of recent years naturally would have to ease, at least a bit. Other factors at work include the looming onset of military action in Kosovo, and a meeting of the Fed's policy-making committee next week.
Most investors probably will play it safe by sticking to the sidelines for the next day or two. But that doesn't mean the bargain hunters will hold back for long.
The Dow Jones Industrial Average fell 7.77 points to 9664.06 in mid-afternoon trading, and the Wired Index was 3.55 lower at 596.37. The Nasdaq Composite Index rose 5.83 to 2328.67, and the S&P 500 was down 1.31 at 1260.83.
"There's nothing new here but the blues," Alexander Paris Sr., an analyst with Barrington Research, said of the forces swaying market sentiment. "It's really focused on earnings, but earnings haven't been growing for some time."
Investors have the blues so bad, not even typically optimistic comments from Abby Joseph Cohen, Goldman Sachs' relentlessly bullish market guru, could chase them away. Cohen, who has been pretty darn spot-on in past calls, raised her 12-month target for the Dow to 10,300 from 9850, and for the S&P 500 to 1325 from 1300.
"A" for effort, Abby.
At least tech stocks, which took such a merciless beating a day earlier, were turning in a substantially better performance. Network-equipment maker 3Com (COMS) led the way, advancing 38 cents to US$24 as it reported quarterly profit of 24 cents a diluted share, a penny higher than estimates. Those estimates, however, had been reduced after the company warned of slower sales earlier this month, so the better-than-expected showing is something of a hollow victory.
Computer makers seem to be rebounding from all those gloomy predictions about the PC business entering a prolonged slump. Dell Computer (DELL) rose $1.81 to $37.50 after saying it anticipates a 70 percent increase in shipments to the Asia-Pacific region this year (excluding Japan, which remains mired in economic cluelessness). Dell is most optimistic about sales growth in China and Australia.
For its part, IBM (IBM) gained $2.06 to $167.44 as it inked a five-year, $3 billion accord to provide computer parts to data-storage dynamo EMC. The deal echoes that of Big Blue's $16 billion pact with Dell, and indicates that IBM is quite serious about positioning itself as a leading supplier of high-tech components. EMC (EMC) was $2.31 higher at $116.19.
Bad news for other component manufacturers? Could be. Take a look at Read-Rite (RDRT), a maker of recording heads for disk drives, which dropped 20 percent to $6.17 after warning it will report a loss for the current quarter. Analysts had been looking for profit of 7 cents a share, but the company now foresees sales decreasing by about 10 percent from the previous quarter, when it posted income of 2 cents a share.
Oh, and another Internet company went public. You'll never guess what happened.
Actually, you could see this coming a mile off. MiningCo.com (MINE), the human-centric search service, more than doubled to $55.50 after debuting with 3 million shares initially priced at $25 apiece. Displaying an impeccable Net pedigree, MiningCo lost nearly $16 million last year, compared with almost $9 million a year earlier. A solid investment by anyone's standard.
