Stocks rebounded from session lows to finish higher on Wednesday, as bargain hunters stepped in amid downbeat profit reports.
The Dow Jones Industrial average reversed course in late afternoon trading to finish higher by 44.39 points, or 0.53%, to 8,494.55. The tech-heavy Nasdaq composite index was up 27.44 points, or 2.12%, to 1,320.24. And the broader Standard & Poor's 500-stock index added 5.97 points, or 0.67%, to 896.13.
Among the highlights, Express Scripts (ESRX), a drug benefits plans manager, was showing weakness after Aetna (AET) said it will take its prescription drug business in-house, ending its contract with Express Scripts. Analysts worry other companies may follow suit.
Also in the pharmaceuticals sector, Lilly (LLY) reported a 20% gain in earnings, in part because of a charge a year ago, but the drug maker saw Prozac sales slide and lowered its fourth-quarter outlook, according to wire reports. Among the biggest session losers were drugs and biotech issues.
The technology group got a boost after enterprise software company Computer Associates' (CA) reported a second-quarter profit and raised fiscal 2003 earnings guidance.
But telecommunications equipment maker Lucent Technologies (LU) posted a $2.88 billion net loss, its 10th straight quarterly loss, as customers continued to slash spending. Lucent warned sales may drop by as much as 10% in its current quarter, according to wire-service reports.
Shares of financial services giant Citigroup (C) were under pressure after Chief Executive Sanford Weill agreed to be questioned New York state's attorney general as part of a probe of the company's research practices, according to wire reports.
But there were some bright spots. Chemical company DuPont (DD) said its quarterly earnings more than doubled, fueled by brisk sales to the automotive and housing industries, according to wire-service reports.
Meanwhile in Washington, President Bush signed into law a bill giving him the tools he wants to wage an expensive, no-end-in-sight global fight against terror and possibly Saddam Hussein, according to news reports.
U.S. Treasuries closed mixed. Economic research outfit MMS International notes Fed easing hopes have perked up with renewed stock losses and concerns over a possible U.S.-Iraq conflict.
In economic news, the Federal Reserve's Beige Book report said the economy was "sluggish" during the reporting period from late September through early October. The Fed noted a broadbased decline in retail sales, weakness in manufacturing, and lackluster labor markets. On a more positive note, the housing market was generally upbeat. Price gains were noted in medical, insurance, and shipping industries.
European markets ended Wednesday's session with losses. In London, the Financial Times-Stock Exchange 100 index was off 112 points, or 2.72%, to 4,006.90. The biggest contributors to the decline in the FTSE included GlaxoSmithKline, Royal Bank of Scotland, Barclays, Lloyds and BP-Amoco.
Germany's DAX Index plunged 129.42 points, or 4.10%, to 3,026.55. The biggest contributors to the losses in the index were Deutsche Bank, Siemens, Munich RE, Allianz and DaimlerChrysler.
In France, the CAC 40 was down 128.78 points, or 4.13%, to 2,992.23.
In Asia, the markets posted gains. The Nikkei added 25.13 points, or 0.29%, to 8,714.52, despite poor sentiment towards corporate earnings and the chaotic situation concerning the country's financial system.
In Hong Kong, the market surged 255.61 points, or 2.68%, to 9,804.65.