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Techs mixed as markets gyrate

Technology stocks are mixed as Wall Street digests news of weak consumer confidence and a warning from AOL Time Warner.

3 min read
Technology stocks were mixed Tuesday as Wall Street digested news of weak consumer confidence and a warning from AOL Time Warner.

At market close, the Nasdaq composite index picked up 2.24 points to 1,501.64 and the Dow Jones industrial average rose 56.11 to 8,659.97. Both indices were up throughout the first half of the trading session before losing ground in the middle portion of the day.

The Nasdaq closed up 5 percent Monday while the Dow closed up around 4 percent, helping both indexes erase almost one-third of their 15 percent declines in the previous five trading sessions.

But analysts didn't see Tuesday's early gains as the beginning of a recovery. The ability for the markets to hold onto this week's gains depends on the week's economic reports. And the first significant report, on consumer confidence, isn't casting a rosy picture.

Consumer confidence is one of three economic reports that will have a big impact on the markets this week--along with Friday's scheduled release of the Chicago-area purchasing managers index, and the final Michigan consumer sentiment report--because it will indicate data for the post Sept. 11 period, according to ABN AMRO analyst Steven Ricchiuto.

According to the Conference Board, a private business research group, U.S. consumer confidence fell to 97.6 in September, a sharp drop from 114.0 in August. The number was also lower than the 105.1 reading economists had forecast.

The Conference Board's Present Situation Index, which gauges current consumer views of the economy, was down to 125.2 from a revised 144.5 in August. The Expectations Index, which gauges consumers' outlook for the next six months, slid to 79.2 in September from a revised 93.7 in August.

"Clearly, an argument can be made for a sharp dip in both consumer confidence and sentiment immediately after terrorist attacks due to a heightened sense of vulnerability," Ricchiuto said in a note to clients. If consumer confidence and economic statistics show more signs of a downturn, a stock market rebound this week becomes more unsustainable, he said.

Among actively traded stocks, AOL Time Warner rose despite bad news. Shares were up 30 cents to $32.80. The company said Monday it expects 2001 cash earnings and revenue to miss targets because of the decline in advertising and the costs associated with the terrorist attacks on New York City and the Pentagon. Other Internet stocks were mixed, as Yahoo rose 3 cents to $9.28 and Amazon fell 37 cents to $7.09.

Charter Communications, which had been one of the Nasdaq's biggest losers, recovered some losses in the afternoon to close trading down 56 cents to $12.22. Shares had started to slide Monday when the cable company's CEO announced he would step down.

Sun Microsystems, off 4 cents to $8.69, announced the debut of a new server called the Sun Fire 15K, intended to provide competition with IBM for the lucrative Unix server market. IBM was off 35 cents to $94.45.

WorldCom was up 51 cents to $14.32 following news that the communications company bid $40 million for assets of the troubled Internet service provider Rhythms NetConnections.

Intel fell 35 cents to $21.66, Oracle lost 27 cents to $12.25, Cisco Systems was up 4 cents to $12.60 and Microsoft fell 71 cents to $ 51.30.

Staff and Reuters contributed to this report.