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Blue Chips Carry the Ball

Stocks ended mixed on Friday with the broader market moving higher on upbeat earnings news from a couple of blue chips while the Nasdaq sagged on some disappointing results from key tech names.

The Dow Jones industrial average ended up 51.83 points, or 0.51%, to 10,257.11. The Nasdaq Composite index was off 5.68 points, or 0.32%, to 1,796.75. And the broader Standard & Poor's 500 index, meanwhile, crept up 0.69 of a point, or 0.06%, to 1,125.16.

Investors are bracing for another crush of earnings reports next week. Among some of the big names set to report are diversified conglomerate 3M (MMM), oil major ExxonMobil (XOM), media giant AOL Time Warner (AOL) and telecom company WorldCom (MCIT).

Next week will be a busy one on the data front as well. Economic reports to watch include March durable goods orders and new home sales on Wednesday; the employment cost index for the first quarter, weekly jobless claims and existing home sales on Thursday; and the University of Michigan consumer sentiment survey for January and advance reading on first quarter gross domestic product on Friday.

Most economists expect first quarter GDP growth of 5.0%, up from the 1.7% in the fourth quarter. The consumer sentiment survey, a gauge of consumer's optimism about the economy, is seen ticking up to 94.6 from 94.2.

Lifting the Dow Jones industrial average higher on Friday was International Paper (IP), the top forest products company, which reported a net profit of $65 million, or $0.13 per share, compared with a net loss of $44 million, or $0.09 a share, a year ago. It was the first net profit in seven quarters and the company credited cost cutting efforts.

An FBI warning of a possible terrorist attack on U.S. financial institutions had little effect on the market.

Wall Street instead digested results from software giant Microsoft (MSFT), a key tech bellwether, which posted a third fiscal quarter revenue gain but profits that appeared to fall short of Wall Street's expectations. Nevertheless, Merrill Lynch said the company will outperform rivals even after Microsoft reduced its profit forecast for the next year.

Denting the Nasdaq was news from Qwest Communications (Q), a telecom company, which unsettled tech investors after saying it will cut 2,000 jobs and warned its first-quarter and full-year 2002 results will miss expectations because of limp demand.

BellSouth Corp (BLS), the No. 3 U.S. local telephone company, said its first-quarter net income grew thanks to a one time gain. But the company lowered its profit outlook for 2002, citing limp demand in the weak economy.

Some tech companies provided more encouraging news. Sun Microsystems (SUNW) reported a narrower than expected loss of $0.01 per share. Quarterly revenue was a bit weaker than expected, falling 24% to $3.10 billion.

Compaq (CPQ) posted first quarter earnings per share of $0.04, beating the consensus estimate by three cents. eBay (EBAY) also reported results that beat analysts' forecast after the bell.

Among other stocks in the Dow, financial powerhouse American Express Co. (AXP) reported its first gain in quarterly profits in a year on cost-cutting efforts.

In the airlines, United Airlines parent UAL Corp. (UAL), reported a net loss of $510 million, or $9.22 a share, compared with a net loss of $313 million, or $5.97 a share, a year earlier. UAL has suffered from declining traffic as Americans are flying less after the September 11 terrorist attacks.

Treasury Markets

Longer-dated issues were higher Friday as Treasuries caught a bid late in the session however after the FBI warned of a possible terrorist attack on U.S. financial institutions, but the move faded some on lack of specificity.

World Markets

European stock markets closed higher. In London, the Financial Times-Stock Exchange 100 index was up 14.20 points, or 0.27%, 5,243.60 as the US market was higher. There was no economic news at the end of a winning week.

In France, the CAC 40 gained 17.59 points, or 0.38%, at 4,606.42.

Germany's Dax Index was up 21.67 points, or 0.41%, at 5,284.55 as some worried that the IG Metall labor agreement will be inflationary, leading to a slow economic recovery. German February construction orders rose 6.1%.

In Asia, the markets ended mixed. Japan's Nikkei lost 63.72 points, or 0.55% to close at 11,512.01 as Japan's two major stock indices ended lower, but recouped some of their early losses, as technology shares weighed down the market on earnings pessimism resulting from poor outlooks from Microsoft and Nokia.

In Hong Kong, the Hang Seng added 35.03 points, or 0.31%, to close at 11,252.18.

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