Markets show little spark ahead of holiday
Technology stocks remain mostly flat on a holiday-shortened trading session, while the Dow Jones industrial average receives a boost from some old-economy stocks.
The Nasdaq composite index rose 25.08 to 3,991.19, and Standard & Poor's 500 index dropped 14.63 to 1,469.23.
The Dow rose 112.78 to close at 10,560.67, led by Caterpillar, SBC Communications and JP Morgan.
At the end of regular trading, construction equipment maker Caterpillar rose $2.06 to $35.94; telecom giant SBC gained $2.56 to $46.56; and financial services company JP Morgan rose $5.63 to $115.75.
Among large-cap tech stocks, chipmaking giant Intel closed up $3.19 at $136.88, and Microsoft remained unchanged at $80.
Investors had little news to provide guidance on the direction of the market. The National Association of Purchasing Management reported that economic activity in the manufacturing industry grew for the 17th consecutive month in June. The group's index climbed 51.8 percent in June compared to 53.2 percent in May, indicating that the economy is still growing but at a slower rate.
"Today's data gives the Fed an indication that they did the right thing," said Peter Kretzmer, an economist at Banc of America Securities. The Federal Reserve elected to leave interest rates unchanged last week for the time being, noting that the economy showed some signs of slowing down.
Yet, many observers believe that the Fed could raise interest rates as it resumes its fight against inflation the next time it meets in August.
"What the Fed needs to know now is not what's going on in the manufacturing sector or the labor market, although they are important," said Kretzmer. "But it needs to watch spending patterns."
Lower spending indicates falling demand for goods and shows that the economy is cooling down, which decreases the chance of higher inflation.
In trading today, the CNET tech index rose 40.59 to close at 2,844.69. Winners edged out losers, with 65 of the 97 stocks in the index rising, 28 falling and four remaining unchanged.
Wireless companies gained nearly 4 percent, the largest rise among the 18 sectors tracked. Server software developers were the day's largest losers, dropping almost 3 percent.
Database software maker Informix, was the biggest percentage loser and the most active stock on the Nasdaq. The shares fell $2.75, or about 37 percent, to $4.69. Volume topped 29.6 million shares, nearly five times the stock's daily average volume.
Among members of the CNET tech index, Advanced Micro Devices (AMD) and JDS Uniphase posted strong gains.
AMD rose $7, or 9 percent, to $84.25, while JDS gained $8.19, or almost 7 percent, to $128.06. The company announced yesterday that it will form an alliance with other companies to go after Hewlett-Packard's share of the printer market. HP closed down $8.88 at $130.88.
The Philadelphia semiconductor index rose 40.38, or about 4 percent, to 1,180.91, led by chipmaker AMD.
Micrografx shares fell 56 cents to $1.75, almost a quarter of their value, after the graphics maker announced restructuring and layoffs amid slowing sales.
Oracle shares dropped $3.88 to $80.19 today after the database software giant announced last Friday the resignation of president and chief operating officer Ray Lane.