NEW YORK, March 1: High-tech stocks rose on Friday, led by semiconductors after a brokerage warmed to sector giant Intel Corp., and blue chips eked out slim gains on signs of improvement in the US economy.
But the broad market logged its third down month in a row amid renewed concerns over a US war with Iraq.
People are still afraid that something will go off in the Middle East, said Todd Clark, head of listed trading at Wells Fargo Securities in San Francisco. Clark said the Iraqi decision to destroy its missiles was viewed positively, but then President George W. Bush said it wouldn’t be enough to meet a United Nations resolution that the country disarm.
Stocks rallied earlier on surprisingly healthy readings on business activity in the U.S. Midwest and economic growth for the fourth quarter of 2002, when the U.S. economy grew at twice the annual rate than previously estimated as businesses rebuilt inventories and consumers opened the wallets.
The economic news was pretty good. Everything was slightly higher. But we have been having a seesaw market, said Andrew Baker, senior trader at Wedbush Morgan. People don’t see the need to chase these rallies when nothing’s been resolved.
Major market gauges had scored gains of more than 1 per cent earlier, but by mid-session much of the rally outside of the technology sector was gone, with blue-chip issues dipping into negative territory at times.
The tech-laced Nasdaq Composite rose 13.60 points, or 1.03 per cent, to 1,337.54, according to the latest available data. The blue-chip Dow Jones industrial average gained 6.09 points, or 0.08 per cent, to 7,891.08, after earlier rising to an intraday high of 7,965.80.
For February, the Dow fell about 2.02 per cent, while the S&P 500 was off 1.70 per cent. In contrast, the Nasdaq finished February up 1.26 per cent, after snapping a two-month losing streak in January.
Market watchers said the specter of an imminent US attack on Iraq is haunting Wall Street. Iraq said in principle it would obey United Nations orders to destroy its ballistic missiles, but the United States pressed on with its military buildup in the Gulf region.
Intel rose 56 cents, or 3.4 per cent, to $17.26, helping the Dow. Investment house Lehman Brothers raised its per-share profit outlook for Intel, the world’s largest maker of computer chips, in 2003 and in 2004, citing overseas demand and market share gains. It was the most active stock on Nasdaq.
The Philadelphia semiconductor index rose 2.78 per cent, reflecting gains by Xilinx Inc., up $1.12 at $22.90, and KLA Tencor, up 62 cents at $35.75.—Reuters