Blue chips climb, tech slips amid conflicting economic signals

AP Business WriterNEW YORK (AP) -- Investors gave blue chips another comfortable boost Friday but nudged tech shares slightly lower as they dealt with conflicting signals about the economy.

Working in Wall Street's favor were comments Thursday by Federal Reserve Chairman Alan Greenspan, who said the recession could soon be over. But with many companies still unable to confirm a pickup in business, the market's gains were limited and, in many cases, were more attributable to bargain-hunting than a shift in investor sentiment.

The Dow Jones industrial average finished up 44.01, or 0.5 percent, at 9,840.08, according to preliminary calculations. The Dow pulled out a three-session winning streak, advancing 65 Thursday on Greenspan's comments and gaining 17 Wednesday due to bargain hunting.

The broader market was narrowly divided. The Nasdaq composite index slipped 4.88, or 0.3 percent, to 1,937.70, while the Standard & Poor's 500 index inched up 1.13, or 0.1 percent, to 1,133.28.

"The only way the market can get going is if earnings accelerate, and don't just sit around at the bottom," said Gary Kaltbaum, market technician for Investors' Edge Partners in Orlando, Fla. "If companies say, 'Things aren't getting any worse,' all that does is bump up stocks a bit. In order to get things going, you have to have growth again, and we just don't have that yet."

On Friday, blue chips enjoyed widespread gains, which analysts attributed largely to cheaper prices and somewhat to Greenspan's comments. Procter & Gamble rose $1.36 to $79.14, Honeywell climbed $1.10 to $32.70 and Caterpillar gained $1 to $50.10.

Better-than-expected earnings helped other stocks, including Lockheed Martin, up 59 cents at $50.

In tech trading, PMC-Sierra rose $2.29 to $24.15 after reporting a fourth-quarter loss of 15 cents a share, beating estimates by a penny. And, Goldman Sachs raised its rating on the maker of semiconductor equipment.

But disappointing reports and outlooks kept the tech sector from advancing. Fiber optic maker JDS Uniphase fell 73 cents to $7.16 on a wider-than-expected loss.

Computer maker Gateway slid nearly 18 percent, down $1.14 at $5.22, after announcing Thursday it will cut 2,250 jobs and close 19 stores and several offices as it deals with sluggish sales and declining market share. Gateway earned 2 cents a share, meeting Wall Street's expectations. Additionally, several investment banks, including Morgan Stanley and Bank of America, downgraded Gateway's shares.

Stocks have largely fallen this month amid a lack of positive news from companies. Analysts said the selloff wasn't surprising given how strongly investors snapped up shares late last year based on hopes of a rebound in profits rather than evidence of growth. By Jan. 4, the buying had propelled the Dow to its best close since the terror attacks. The Dow stood at 10,259.74, up 24.5 percent from its Sept. 21 low of 8,235.81. The Dow is now 19.4 percent above that low.

"The fourth-quarter rally was an anticipatory rally that comes as you believe the worst is over. Some pullback from that was expected," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co. "When earnings start to come through in earnest, there will be a second, more fundamental leg up. We're kind of in a hiatus right now."

Advancing issues outnumbered decliners 8 to 7 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, which tracks the performance of smaller company stocks, slipped 0.38, or 0.1 percent, to 479.35.

In overseas trading, Japan's Nikkei stock average finished Friday with a gain of 0.7 percent. In Europe, Britain's FT-SE 100 fell 0.8 percent, France's CAC-40 lost 0.5 percent, and Germany's DAX index declined 0.3 percent.

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