Tech Industry

Nasdaq, Dow go in circles, remain flat

Stocks post moderate gains as investors remain cautious pending an indication from the Federal Reserve on the direction of interest rates and the beginning of earnings season.

Stocks posted moderate gains today as investors remained cautious pending an indication from the Federal Reserve on the direction of interest rates and the beginning of earnings season.

"I think long-term investors should have gone away for the last two weeks," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "The markets can't seem to shake out of this trading range since the spike in employment numbers," he said. "It's been almost ten days of sideways trading."

A government report released on June 2 showed that non-farm payrolls rose by a lower-than-expected 231,000 jobs in May, compared with an expected gain of 383,000 jobs. The unemployment rate climbed to 4.1 percent from 3.9 percent in April.

The markets responded with strong gains, but have not moved strongly in any direction despite data from the Labor Department, which showed little signs of inflation at the producer and consumer level. Other reports uncovered the roots of an economic slowdown.

"It's certainly hard to swallow the Bureau of Labor Statistics' numbers," he said. "Anyone who has recently pulled up to the pump can tell you that gasoline prices have not gone down."

The government reported yesterday that energy costs declined at the consumer level during the month of May.

Yet Meehan said he believes the markets have more to worry about than a discrepancy between some numbers. "People are more worried about what the economic slowdown will do to corporate profits, than about what the Fed will do" at the end of June.

The markets finished on the upside today. The Nasdaq composite index rose 48.33 to 3,845.74, and the Standard & Poor's 500 index gained 8.06 to 1,478.60.

The Dow Jones industrial average rose 26.87 to close at 10,714.82 led by Coca-Cola.

The markets have not moved strongly in either direction since June 2, when the Nasdaq closed at 3,813.28, the Standard & Poor's 500 at 1,477.19, and the Dow finished at 10,794.76.

At the end of regular trading today, Intel closed up $1.81 at $128.25. Microsoft also rose $1.88 to $72.38.

The CNET tech index gained 42.01 to close at 2,848.40. Winners nudged out losers, with 58 of the 98 stocks in the index rising, 39 falling and one remaining unchanged.

Of the 18 sectors tracked, computer memory storage and telecom equipment companies posted the biggest gains, climbing about 4 percent each. Peripheral makers were the day's largest losers, falling 1 percent.

The initial offering of Rediff.com, an Internet company based in India, recorded large gains on its second day of trading. The shares jumped $6.63, or 34 percent, to $25.94.

Earnings woes plagued shares of Tecnomatix and Osicom Technologies. Tecnomatix was the largest percentage loser on the Nasdaq, falling $8.81, or about 37 percent, to $15.06, while Osicom dropped $16.13, or 25 percent, to $47.88.

Among members of the CNET Tech Index, Conexant recorded strong gains, while investors whacked Qualcomm.

Communications equipment maker Conexant rose $6.50, or nearly 16 percent, to $48 after an analyst at Morgan Stanley raised his rating and earnings estimates on the company.

Qualcomm continued its drop from yesterday and fell $9.06, or almost 13 percent, to $61.44 on volume of 60.1 million shares, close to three times more that its average daily trading volume, making it the most actively traded stock on the Nasdaq. Some analysts think business climate shifts might topple the company's eggs-in-one-basket technology strategy.

The Philadelphia semiconductor index inched up 12.37 to 1,132.50, led by chip equipment maker LSI Logic, which gained $3.94 to close at $61.

Telecommunications giant AT&T has completed its $44 billion merger with cable operator MediaOne Group, creating the country's largest cable operator. The company's shares rose 44 cents to $33.94.

SAP America's newly elected chief executive is orchestrating a turnaround plan for the software behemoth to lift sagging sales and boost employee retention. SAP's shares gained $1.62 to finish at $50.44.