Earnings News Will be the Guide

Investors are awaiting signals for the upcoming earnings season as the first quarter comes to a close

On the last trading day of the first quarter, tech stocks mustered a gain, but blue-chips ended down. On Thursday, the Dow Jones industrial average lost 22.97 points, or 0.22%, to 10,403.94, as it struggled for direction most of the day as gains in IBM (IBM ), Boeing (BA ) & Microsoft (MSFT ) were offset by losses in 3M (MMM ), DuPont (DD ), and Philip Morris (MO ).

The Nasdaq Composite index was up 18.61 points, or 1.02%, to 1,845.36, led by gains in big-name tech stocks such as Cisco Systems (CSCO ) and Microsoft. The broader Standard & Poor's 500 Index added 2.80 points, or 0.24%, to 1,147.21.

In the first quarter, the Dow gained 3.8%, the S&P 500 was flat, and the NASDAQ lost 5.4%.

The U.S. markets will be closed Friday for the Good Friday and Passover holidays. But when markets reopen Monday, investors will be heading into what is historically the best-performing month of the year for stocks, says Bryan Piskorowski, market commentator for Prudential Securities.

"It's a new month and new questions will come as the earnings season starts," he says. "We're likely to see more preannouncements." Investors have been searching for a catalyst to move the market higher. "Upbeat guidance would clearly bode well -- especially from tech stocks, which are in dire need for upbeat tone... It will be all about future guidance coming out," Piskorowski says.

A couple of economic reports will be watched closely next week. On Monday, investors will get the latest read from the ISM, formerly the National Association of Purchasing Managers. Standard & Poor's MMS expects a rise in the index 55.0 from 54.7. A rise would support the view that the factory sector is recovering with the economy.

Later in the week on Friday, market watchers will be looking at March employment report. S&P MMS sees payrolls rising by 75,000 and the unemployment rate rising to 5.6% from 5.5% from February.

Those reports come on the heels of Thursday's final read of the University of Michigan consumer sentiment numbers for the month of March, which showed continued improvement. The index rose to 95.7 from 95 in the preliminary reading. Current conditions reached 100.4, up from 99.3 preliminarily (96.2 in February), while expectations inched up to 92.7 from the preliminary 92.3 (87.2 in February).

In addition, a report showed manufacturing activity in the Chicago area region picked up in March. The Chicago-PMI manufacturing index rose to 55.7, up from 53.1 in February. S&P's MMS had predicted a modest rise to 53.5 from last month. The recent data have supported the view that the factory sector is in the process of recovering. Meanwhile, investors digested a better-than-expected revision to fourth-quarter gross domestic product ( GDP) growth, which rose to 1.7% from 1.4% previously. Finally, weekly jobless claims were worse-than-expected, jumping 18,000 to 394,000.

In corporate news Thursday, dissident board director Walter Hewlett filed a lawsuit against Hewlett-Packard (HWP ) for what he alleges to be illegal maneuvers by the tech giant to gain votes in favor of the highly-contested merger with Compaq Computer (CPQ ).

Juniper Networks (JNPR ), the No. 2 maker of gear that powers the Internet, cut its first-quarter revenue outlook amid ongoing cautious spending by its cash-strapped service provider and telecom carrier customers.

Drug maker Watson Pharmaceuticals (WPI ) said on Thursday its patch to treat overactive bladders was rejected by U.S. regulators.

ConAgra (CAG ) posted a third-quarter profit that beat Wall Street's expectations. The food giant said it plans to "modestly exceed" analysts' average for fiscal 2002.

Among Dow stocks, UBS Warburg reiterated its "buy" rating on General Motors (GM ) and increased 2002 and 2003 earnings-per-share estimates on belief GM can meet its profit goal of $10 by 2005.

Treasury Market

U.S. Treasuries finished lower in price following Thursday's raft of economic data that mainly showed improvement in the economy.

World Markets

European stocks finished higher amid a strong appetite for cyclical stocks that might benefit from the anticipated economic upturn and short covering ahead of the holiday. In London, the Financial Times-Stock Exchange 100 index ended higher by 57.10 points, or 1.09%, to 5,271.80. In France, the CAC 40 gained 64.82 points, or 1.40%, to 4,688.02. In Germany, the DAX Index finished up 49.29 points, or 0.92%, to 5,397.29.

In Asia, the markets ended higher. In Japan, the benchmark Nikkei 225 index jumped 9.43 points, or 0.08%, to 11,333.11, amid buying before the fiscal year end. Hong Kong's Hang Seng index added 45.04 points, or 0.41%, to 11,032.92.

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