Nasdaq falls just a sliver; Dow jumps
A late round of buying helps the tech-heavy Nasdaq minimize its losses despite weakness among networking stocks and more bad news for the economy.
The Nasdaq composite index closed at 1,460.71, down just 3.33, after a brief foray into positive territory during late-session trading. The Dow Jones industrial average rose 114.03 to 8,681.42.
In economic news, initial jobless claims showed the unemployment rate at its highest level in nine years. The Labor Department said the number of initial jobless claims rose by 58,000 to 450,000 for the week ended Sept. 22.
Data on durable goods orders also painted a grim picture of the economy. The Commerce Department's report showed that new orders for costly manufactured goods fell 0.3 percent to $180.83 billion in August, declining for a third straight month. It was the first time in more than two years--since the period from April-June 1999--that orders had fallen for three months in a row.
The International Monetary Fund confirmed that the grim economic data is hurting the economy and announced that the United States has entered a recession. The IMF is forecasting world Gross Domestic Product growth for 2001 to come in at 2.6 percent, down from an early projection of 3.2 percent in May, and it trimmed predictions to 3.5 percent from 3.9 percent in May.
"This would mark the slowest pace of growth since 1993," Merrill Lynch analyst David Rosenberg said in a research note. And even so, these predictions could be "a tad optimistic, especially given some of the numbers still coming out of Asia."
In company news, networking-related companies took hits. Internet infrastructure maker Extreme Networks, off 80 cents to $6.53, contributed to the CNET networking index's decline of 4 percent.
Networking giant Cisco Systems dropped 99 cents, or 8 percent, to $11.24 after Morgan Stanley cut its 2002 earnings forecast by 21 percent, citing weakness in China.
Networking equipment maker Sonus was the Nasdaq's biggest loser Thursday, down $3.42, or over 50 percent, to $2.88, after a warning that it will lose around 5 cents to 7 cents a share for the third quarter, below analysts' expectations for earnings of a penny a share.
Networking storage company Brocade, down $1.53 to $14.16, fell after J.P. Morgan cut estimates on the company. The whole storage sector was down sharply, with the CNET storage index off around 5 percent. Storage behemoth EMC was off 83 cents to $11.89.
Semiconductor stocks took a hit after Goldman Sachs lowered earnings forecasts for some chipmakers, including Analog Devices, off 81 cents to $32.05, and Texas Instruments, unchanged at $23.75. The CNET semiconductor index was off almost 4 percent.
Among other high-tech stocks, Intel fell 35 cents to $20.55, Oracle lost 16 cents to $12.04, and Microsoft lost 33 cents to $49.94.
AOL Time Warner rose a penny to $32.26, Yahoo rose $1, or 12 percent, to $9.11, and Amazon.com fell 15 cents to $6.20.
Staff and Reuters contributed to this report.