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Date Posted: 20:06:52 11/21/00 Tue
Author: q
Author Host/IP: slip-32-100-192-101.in.us.prserv.net / 32.100.192.101
Subject: q

11/21/2000 Blue Chips End Up, Techs Slip

By Elizabeth Lazarowitz

NEW YORK (Reuters) - Blue-chip stocks eked out modest gains on Tuesday, but technology stocks ended down after a day of pacing back and forth in a market plagued by worries about dwindling corporate earnings.

Traders scooped up heavyweights of the recently battered technology sector, like Cisco Systems (NasdaqNM:CSCO - news). But that was not enough to offset further drops in Internet stocks, like Yahoo! Inc. (NasdaqNM:YHOO - news), which fell to a 2-year low on investor worries about a slowdown in advertising spending by dot-com companies.

``The whole market on the tech side just has had no support,'' said Jeffrey Davis, chief investment strategist at State Street Global Advisors. ``The only thing you can do is keep your eye on the companies you like and say, 'OK, it's time to bottom-fish.'''

The technology-heavy Nasdaq Composite Index (^IXIC - news) slipped 4.19 points, or 0.15 percent, to end at 2,871.45. The index earlier Tuesday plumbed its lowest levels in more than a year, a day after it dropped 5 percent. Some 438 shares hit new 52-week lows on the Nasdaq.

``Clearly there is still massive weakness in technology,'' said Erik Gustafson, a portfolio manager at Stein Roe & Farnham. ``Investors are simply unwilling to commit capital with all of the uncertainty out there.''

The blue-chip Dow Jones industrial average (^DJI - news), meanwhile, rose 31.85 points, or 0.30 percent, to 10,494.50.

The Dow was lifted in large part by a gain in aerospace giant Boeing Co. (NYSE:BA - news). Boeing climbed $3-1/16 to $68-5/8 after Wall Street sources cited a positive report issued by Credit Suisse First Boston on the defense sector.

The broader Standard & Poor's 500 Index (^SPX - news) gained 4.73 points, or 0.35 percent, to 1,347.35.

Year to date, the Dow is down 8.7 percent, the Nasdaq composite is off nearly 30 percent, and the S&P 500 has dropped 8.3 percent.

But the Dow's gains were tempered by a further decline in shares of the world's largest soft-drink maker, Coca Cola Co. (NYSE:KO - news), which fell $1-5/16 to $55-1/4. Coke's board met on Tuesday to consider a bid for food company Quaker Oats (NYSE:OAT - news).

Technology stocks bounded higher earlier in the day after Agilent Technologies Inc. (NYSE:A - news), the electronics testing and manufacturing company, and medical device maker Medtronic Inc. (NYSE:MDT - news) posted upbeat earnings reports.

An optimistic outlook from communications equipment maker Nortel Networks (Toronto:NT.TO - news) (NYSE:NT - news) also lifted investors' spirits.

But on the flip side of the earnings story was Nortel rival Lucent Technologies Inc. (NYSE:LU - news), which warned that it might have to cut its expectations for the fourth quarter.

Lucent on Tuesday warned it may revise its fourth-quarter results downward. On Monday, Nortel reaffirmed its guidance through 2001, saying it continues to see strong growth in sales of optical, wireless and Internet equipment.

``The market is having a bit of an identity crisis on a day like this,'' said Charlie Crane, chief market strategist at Key Asset Management.

Shares of Lucent, the most active on the New York Stock Exchange (news - web sites), fell about 16 percent, down $3-3/8 to end at $17-9/16. Nortel's stock, hit recently by fears of lost contracts and layoffs, rose $2-15/16 to $38-3/16, for a gain of about 8 percent.

Agilent jumped $4 to $48-5/8, while Medtronic rose $1-9/16 to $51-1/8.

Cisco, the tech sector's bellwether, added $2-7/16 to close at $53-11/16. Yahoo!, the blue-chip Internet stock, plunged 14.7 percent to $41-11/16.

Adding to investors' queasiness over the stock market's recent gyrations was news that the U.S. trade deficit for September jumped to a record $34.26 billion, up from a revised deficit of $29.81 billion in August.

``Exports are down and imports are up,'' said Peter Cardillo, director of research at Westfalia Investments. ``It says the economy is slowing and the reality is you're not exporting ... and the manufacturing sector continues to slow.''

The widening U.S. trade gap -- spurred in large part by a blockbuster oil bill -- worried investors because it showed U.S. exports are slowing, which is bad news for U.S. manufacturers.

The deficit also means U.S. markets will become even more dependent on inflows of foreign capital to pay for the import bill. That could send the strong U.S. dollar crashing at one point and dry up foreign purchases of U.S. stocks.

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