Stocks ended mixed on Thursday as investors cashed in on early gains in the technology sector from a rally that had been stoked by interest rate cuts in Europe designed to stimulate the global economy.
The monetary intervention in Europe came just two days after the U.S. Federal Reserve enacted a hefty half-percentage point cut in interest rates. Rate cuts can spur spending by companies and consumers as they lower borrowing costs.
Among the Nasdaq stocks on the downswing was Dell Computer (DELL), a leading personal computer maker.
On Thursday, both the Bank of England and the European Central Bank took interest rates down by a half-percentage point. This follows Tuesday's move by U.S. Federal Reserve policymakers to slash interest rates for the tenth time this year -- the third time since the September 11 attacks -- in an effort to boost the sagging U.S. economy. Fed officials also left the door open for more cuts in December.
Among some of the stocks benefiting from the lower interest rates were the rate-sensitive financial services firms including American Express Co. (AXP) and Citgroup Inc. (C). Both are components of the Dow Jones industrial average.
Economic data continue to be bleak. U.S. initial jobless claims fell 46,000 to 450,000 for the week ending Nov. 3, which was much lower than median expectations. But in a sign that it is taking people longer to find jobs, continuing claims rose to 3,724,000 for the week ending Oct. 27 -- the highest since April 1983.
U.S. same-store sales, or sales at stores that have been open at least one year, reportedly increased about 2% in October, on a year over year basis, according to S&P's market analysis arm MMS. The rise suggested that some of the shock from the terrorist attacks in September was wearing off, MMS said.
In merger news, energy company Dynegy Inc. (DYN) is mulling buying troubled energy trader Enron Corp. (ENE) in a deal worth about $8 billion. Enron shares have plunged this year amid concerns about the company's liquidity and complex financial transactions involving a former chief financial officer. The SEC is investigating the transactions.
Corporate news was mixed. No. 1 retailer Wal-Mart Stores Inc. (WMT)(NYSE:WMT - news) said its sales at stores open at least a year in October rose a greater than expected 6.7%.
But Barnes & Noble Inc. (BKS)(NYSE:BKS - news), the No. 1 U.S. bookseller, said it sees lower 2001 earnings and blamed the treat of further terrorist attacks for hurting booksales at its stores, many of which are in malls.
The Dow Jones industrial average ended up 33.15 points, or 0.35%, to 9,587.52 after rising by more than 140 points earlier in the session. The tech-heavy Nasdaq composite index, meanwhile, eased 9.75 points, or 0.53%, to 1,827.78 after being in the black for most of the session. The broader S&P 500 index inched up 2.73 points, or 0.24%, to 1,118.53.
U.S. Treasuries were lower as equities mostly headed higher. MMS blamed profit-taking for some of the weakness as traders cashed in on gains ahead of the long U.S. weekend. The bond market is open for a half day on Friday and will be closed on Monday for the Veterans Day holiday.
European markets ended higher. In London, the Financial Times-Stock Exchange 100 index was up 61.80 points, or 1.18%, to 5,278.10 after the Bank of England cut key rates 50 basis points to bolster the economy. In France, the CAC 40 added 79.77 points, or 1.78%, to 4,573.04. In Germany, the DAX Index gained 132.91 points, or 2.73%, to 4993.57 after the European Central Bank lowered key interest rates 50 basis points. The news took some of the sting out of a report that German Industrial Production fell 2% in September.
Asian markets closed with gains. Japan's benchmark Nikkei average added 146.81 points, or 1.43%, to 10,431.79 as pension funds reportedly went on a buying spree. In Hong Kong, the Hang Seng gained 268.83 points, or 2.62%, to 10,538.62.