Investors hungry for earnings drive up tech stocks


NEW YORK -- U.S. stocks, with the exception of the Dow Jones industrial average, rose for a third day yesterday on the strength of gains in technology companies.

Investors looking for companies with the fastest-growing earnings drove up tech stocks such as Oracle Corp., Applied Materials Inc. and Cisco Systems Inc.

"You have a lot of companies that are well positioned in their own product cycles, where a lot of good earnings are still ahead of them," said Paul Wick, money manager at $1 billion Peregrine Growth Equity Fund in Minneapolis.

The Dow industrials, hurt by declines in DuPont Co. and Minnesota Mining & Manufacturing Co., fell 7.39, to 4,707.40, lagging gains in the Nasdaq composite, which was up 6.43 to 1,000.18, and the Standard & Poor's 500 index, which was ahead 0.51, to 561.61.

Procter & Gamble Co., Philip Morris Cos., Walt Disney Co. and United Technologies Corp. each surged more than a point, slowing the Dow's retreat.

3M ignited the loss, dropping $3.50, to $56, after saying earnings grew to 84 cents from 81 cents, lower than consensus forecasts of 93 cents a share.

DuPont tumbled $2.375, to $68.50. The chemical maker reported earnings of $1.70 a share, up from $1.16 last year but beneath analysts' estimate of $1.75. Analysts said DuPont's earnings may be at a peak. Union Carbide Corp. and Mobil Corp. both recently warned that chemical prices are weakening.

Helping to offset the losses were P&G;, shares of which surged $1.75, to $69.75. The household product maker sought Food and Drug Administration approval for a new, prescription-only ulcer drug.

Also, Philip Morris rose $1.25, to $75.125. A district court in New Orleans agreed to review the certification of a class-action suit against tobacco companies there.

And Disney climbed $1.125, to $56.875. The filmmaker said fiscal third-quarter earnings widened to 60 cents a share from 49 cents last year and analysts' forecasts of 55 cents.

FTC At one stage, the Standard & Poor's 500-stock index reached a session record of 563.78 before retreating. Stocks in the oil, soft drink, household product, tobacco and drug industries posted the biggest gains.

About six stocks rose on the New York Stock Exchange for every five that declined.

The Nasdaq composite index, loaded with technology stocks, led the broader market as a host of computer-related companies reported rising earnings, up 6.41, to 1,000.17.

MCI Communications Corp., Amgen Inc. and Linear Technology Corp. helped to send the Nasdaq to within 0.57 percent of its record high of 1,005.89, reached July 17.

U.S. Robotics Corp. soared $20.25, to $141. The maker of computer-communications equipment earned $1.19 in its fiscal first quarter, up from 58 cents last year and analysts' projections of 92 cents.

Oil-service companies climbed after posting better-than-expected earnings by cutting costs and emphasizing overseas operations.

Halliburton Co. surged $1.375, to $40.25. The company said second-quarter net income rose to $56.2 million, or 49 cents a share, compared with a loss of $19.2 million, or 17 cents, a year ago. Analysts had forecast earnings of 33 cents a share.

Share prices are getting a boost from a flood of money into equity mutual funds and "little if any redemptions," said Steve Mindnich, trader at Jefferies & Co. in Short Hills, N.J. "People are just looking at the [stock] market as the easiest way to make money and think every time there's a sell-off it's a buying opportunity."

Investors poured $25 billion into stock mutual funds in June, up from $23.2 billion in May and $20.2 billion a year ago, the Investment Company Institute, a trade association for mutual funds, said yesterday.

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