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Nasdaq flat after sliding in anthrax scare

A surge of buying late in the session helps the Nasdaq erase losses incurred earlier after a case of anthrax was reported in New York.

A surge of buying late in the session helped the Nasdaq erase losses incurred earlier Friday after an anthrax scare in New York.

The tech-heavy Nasdaq composite index ended Friday up 1.93 to 1,703.40. The Nasdaq had lost as much as 50 points from the previous close before a round of buying in the last two hours of regular trading. The Dow Jones industrial average fell 66.29 to 9,344.16. CNET's technology indexes were mixed.

Investors were spooked earlier after reports that a New York-based employee of NBC tested positive for anthrax, which has also been detected in three people in Florida in what is being treated as a possible terrorist act.

Juniper Networks, a maker of equipment that routes Internet traffic, rose $4.42 to $21.06 Friday after the company forecast stable revenue over the next two quarters. Rival Cisco Systems also moved higher, up 45 cents, or 3 percent, to $16.91. CNET's Networking index was up about 0.50 percent.

Juniper said its third-quarter earnings topped expectations, and it anticipates that quarter-over-quarter sales will hold steady. The company reported a profit of 10 cents a share, excluding restructuring costs and other items. First Call had predicted it would bring in 7 cents a share.

Analysts were upbeat about how Juniper's report reflected on the rest of the tech sector.

Software maker Network Associates also gained following its quarterly report. The company said fourth-quarter profits will be ahead of Wall Street's estimates. Shares were up 78 cents, or 4 percent, at $18.78.

Network Associates, which specializes in security, said third-quarter earnings were 5 cents a share, topping First Call's predictions by a nickel. The company also said fourth-quarter profit will be 7 cents to 10 cents a share, excluding noncash and one-time charges. That would also top First Call's current consensus estimate of 5 cents a share.

The economic picture
Although selected tech issues were stronger, the broader markets were weakened by a key economic report. Friday's economic data painted a grimmer macroeconomic picture. Retail sales were off sharply in September following the terrorist attacks, and U.S. wholesale prices rose more than expected.

The Labor Department said Friday that higher costs for gasoline and home heating oil helped push U.S. wholesale prices up more than expected in September. The Producer Price Index rose 0.4 percent, matching August's rise and topping economists' expectations for a slight 0.1 percent gain.

The core rate, which excludes food and energy products, was ahead 0.3 percent in September after falling 0.1 percent in August.

A report on retail sales could spark fears that the economy is in for more of a slowdown as a result of the Sept. 11 terrorist attacks than had been expected. The Commerce Department said retail sales dropped 2.4 percent overall, led by declines in purchases of autos, building supplies and electronics. Excluding the auto sector, sales were off by a smaller 1.6 percent. That's the largest drop seen since the government began compiling comparable retail data in February 1992.

Though economists had expected September retail sales to slip in the wake of the terrorist attacks, the numbers are much worse than the 0.8 percent decline anticipated.

The news, combined with Thursday's data that indicated jobless claims are still high, signaled that consumer confidence, a major driver of the economy, is likely to lay low for a while.

"We think that concerns over job losses, job security and personal security will keep confidence low. It may well be that confidence (like stocks) is bottoming. But remember that confidence did not recover until we won our six-week war in the desert. Few analysts think the war against terrorism will be equally short," said Deutsche Banc Alex Brown analyst Peter Hooper.

However, market sources said consumer sentiment rose in October; the preliminary University of Michigan consumer sentiment index for October rose to 83.4, from a final September reading of 81.8, but the index remains well below levels seen this summer. Economists in a Reuters survey on average had predicted a consumer sentiment index drop to a reading of 76.1.

Among other stocks in the news, DoubleClick shares were up 65 cents to $8.14. The company on Thursday evening reported a steeper third-quarter net loss than expected, but it forecast that fourth-quarter results would be better than expected. The online-advertising company also said it could turn a pro forma profit next year.

Shares in Computer Associates International were off 75 cents to $28.95 after the company said it will chop jobs and take a $20 million charge as a result during its fiscal third quarter. The company said it would trim its work force by about 900 positions, or about 5 percent, to about 17,000 worldwide.

Software maker Vignette tumbled $1.15 to $4.17 after announcing it expects to post a third-quarter core loss and plans to cut 20 percent of its work force.

Among other actively traded shares, Intel rose 49 cents to $25, Oracle fell 3 cents to $14.94, and Microsoft rose 6 cents to $56.38.

Staff and Reuters contributed to this report.