NEW YORK – Technology stocks rose Wednesday, helped by guarded optimism about earnings and a lack of bad anthrax news, but the Dow and the broader market finished flat.
The Dow Jones industrial average edged up 5.54 points, or 0.06 percent, to 9,345.62, and the broad Standard & Poor's 500 added 0.42 of a point, or 0.04 percent, to 1,085.20. The Nasdaq Composite Index rose 27.10 points, or 1.59 percent, to 1,731.54, according to the latest data. It was the Nasdaq's fourth up day in the last five.
"People are thinking we're seeing a bottom," said Crit Thomas, head of growth equities fcks lagged as disappointing news from No. 1 photographic film maker Eastman Kodak Co. weighed on the Dow, and some investors started to swap assets into tech shares. Kodak shares tumbled $3.46, or 10 percent, to $30.71 after it warned fourth-quarter profits would likely fall short of Wall Street's estimates.
"Blue chips tend to be the names you go to when you're worried, but if you're feeling like adding more risk, blue chips are the ones you'd use to generate cash," Thomas said.
AT&T Corp also lost altitude after reporting a sharp drop in profits and warned its core telephone business would take a hit through 2002 amid a weak economy and stiff competition. Investment firm Lehman Bros. cut its rating on the company's shares. The stock fell $1.36, or 7.7 percent, to $16.34.
Nextel Communications Inc., the nation's fifth-largest wireless telephone company, reported a 30 percent increase in revenues as its subscriber growth met estimates. Its shares gained $1.29, or 17.4 percent, to $8.69.
Enron Corp. took another hit, falling $3.38 to $16.41. Prudential Securities cut the company's rating to a rare ``sell'' after the energy company said on Monday that U.S. regulators are looking into some of its transactions.
Eastman Kodak tumbled $3.46 to $30.71 after it warned its profit would fall short of Wall Street's estimates amid slack demand for its film and camera products in a lagging economy.
More than half of the companies in the S&P 500 index have now issued their corporate scorecards in what is one of the heaviest weeks of the reporting period. The third-quarter earnings picture is far from pretty, but many companies have been able to at least meet analysts' estimates, lifting hopes the deterioration in profits is nearing an end.
Tech stocks were higher after upbeat news from Citrix and QLogic Corp., a designer of network equipment that reported strong demand for key products.
``People are thinking we're seeing a bottom,'' said Crit Thomas, head of growth equities for National City Investment Management Co. ``Some companies aren't revising outlooks down, and orders are looking better for others.''
Citrix jumped $3.35 to $24.72 after saying its quarterly net income rose 28 percent on strong sales of its MetaFrame XP line. The software maker also said sales should keep growing by at least 20 percent through 2002. Analysts said the company is riding high since its software helps cut information technology costs by making tech support cheaper and easing demand for new equipment.
QLogic, a designer and supplier of storage area network equipment, soared $5.67 to $41.75 after reporting profits that met analysts' expectations.
Compaq Computer Corp. rose 34 cents to $9.74, after reporting an operating loss in line with Wall Street estimates due to weak technology spending, aggressive pricing, and shipping problems related to the Sept. 11 attacks on the World Trade Center and Pentagon.
In the Nasdaq market, Amazon.com Inc. slumped $1.91 to $7.64 amid worries about slowing revenue growth at the online retail giant. The company warned sales growth in the key holiday period would likely be as much as 12 percent lower than analysts had anticipated.
Wall Street shrugged off the Federal Reserve's so-called ''Beige Book'' report, which said the Sept. 11 attacks on New York City and the Washington area ``sharply reduced'' economic activity at least temporarily in the overall U.S. economy. The Beige Book, an anecdotal look at the U.S. economy, is based on information compiled before Oct. 15.
``The Beige Book isn't having an impact on the equity market,'' said Robert Cohen, a trader at Credit Suisse First Boston. ``They're talking about continuing slowing, but that isn't a surprise to anyone. If anything, it's a positive in that it shows there's no reason for the Fed to change its posture'' about lowering rates further.
Declining issues outnumbered advancers 17 to 13 on the New York Stock Exchange. Consolidated volume was even with Tuesday at 1.59 billion shares.
The Russell 2000 index, which measures the performance of smaller company stocks, inched up 0.28 to 427.65.
Overseas markets were mixed Wednesday. Japan's Nikkei stock average ended the day down 0.6 percent. Britain's FT-SE 100 finished down 0.5 percent, while France's CAC-40 rose 0.7 percent, and Germany's DAX index gained 2.3 percent.
Reuters and the Associated Press contributed to this report.
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