Stocks traded in a narrow range Thursday, reflecting a lack of market-moving news and the seasonal languor on Wall Street.
After the close of trading, computer-equipment giant Hewlett-Packard released the expected disappointing results for its fiscal third quarter. But Chairman Lewis Platt said, “The near-term outlook across our business is uncertain,” sending the stock lower in late trading.
The Dow Jones industrial average slipped 1.10 points, to 5665.78, on New York Stock Exchange volume of just 322 million shares. The Nasdaq composite index gained 1.18, to 1134.69.
Action could be heavier Friday, which will see the so-called double-witching expiration of stock options and stock-index options.
Hewlett-Packard had warned investors in July that its third-quarter report would be disappointing, and it was–40 cents a share, including special charges, down from 55 cents in the year-earlier quarter.
Declining growth in new orders–only 8 percent in the third quarter, compared with a more typical 24 percent in the second quarter–bodes ill for the fourth quarter’s results and contrasts sharply with the upbeat quarterly report and outlook issued this week by Dell Computer.
In late trading, Hewlett was quoted at $39.37, down from $43.37 at the close of the regular NYSE session.
“They’re not exactly wowing the room, saying they’re uncertain about their future,” said Jon Najarian, president of Mercury Trading, a market-making firm at the Chicago Board Options Exchange. “That’s like screaming, `Fire!’ in a crowded room.”
Analysts were unconvinced, however, that the troubled outlook from Hewlett-Packard would spread to the entire computer-technology sector on Friday. Another industry leader, networking developer Cisco Systems, posted slightly better-than-expected results after the close of Nasdaq trading.
The day’s real basket case was Medaphis of Atlanta, a provider of business management services to physicians and hospitals. The stock plunged $21.37, or 60 percent, to $14.25, after the company warned that third-quarter results would be well below Wall Street estimates.
Economic reports out Thursday provided a mixed reading on the outlook for interest rates. The monthly report by the Philadelphia Federal Reserve Bank showed weakening business conditions and no upward pressure on prices.
But the July industrial production report showed a slight increase, contradicting analyst expectations of a slight decrease. The numbers added heft to the view that the second quarter’s strong economic growth continued into the third quarter.
“The momentum is continuing to expand, not slowing down as the market has been (expecting),” economist Maria Ramirez of MRF Inc. in New York told Reuters.
The yield on the benchmark 30-year Treasury bond rose to 6.80 percent from 6.78 percent late Wednesday.
The Securities and Exchange Commission censured Cabot Money Management, the Salem, Mass., investor advisory service, for failing to disclose its substantial holdings of one-time high-flying Presstek stock, which Cabot research director Carlton Lutts touted heavily to subscribers of the Cabot Market Letter.
Presstek, a developer of printing technology, traded as high as $200 a share in May and closed Thursday at $57.25, down $1.75 for the day. Cabot held nearly 5 percent of the stock in its accounts when Lutts called it “the best stock we have ever uncovered in our lifetime.” The ownership stake was not disclosed until mid-June, long after the stock peaked and crashed. Cabot was fined $25,000 for failing to make timely disclosure.
Generation X: The savings habits of the Baby Boom generation leave much to be desired. But the next cohort, which is much smaller, apparently is much more inclined to save and invest.
A survey conducted for the American Stock Exchange found that people 25 years old to 34 years old with annual incomes of at least $30,000 are far more interested in building long-term savings than their Baby Boom elders, now turning 50.
Of the 800 individuals interviewed, 79 percent said they already are saving for their retirement or for their children’s education. Only 10 percent answered “yes” when asked, “Do you believe you can count on Social Security as a source of income when you retire?”
Although the group described themselves as conservative investors and 45 percent called themselves Republicans, their view of “conservative” includes widespread interest in stocks, including stocks of emerging companies and from emerging countries. Earlier generations would have called these investments anything but conservative.
Generation X investors tend to be independent thinkers. Sixty percent answered “no” when asked if they have ever used a broker in making investment decisions.
Local news: Westell Technologies, Oswego, a developer of communications technology, gained 25 cents, to $34.62. GTE and Pacific Telesis Group are testing Westell’s high-speed modem technology, called asymmetrical digital subscriber line. The technology enables phone companies to carry high-speed video, data and Internet communications over traditional copper wire. Westell’s product is also being used by Internet service provider Uunet Technologies’ Canadian unit.
– Sabratek, Niles, a maker of diagnostic and therapeutic medical devices, gained $1.25, to $10.75, after receiving a “buy” recommendation from Salomon Brothers.
