Investors Buy Stocks, But Mood Sours

N E W  Y O R K, July 11, 2001 -- Blue chip stocks and selectedtechnology shares rose today as bargain hunters andpessimists about corporate earnings battled back and forththrough the trading day.

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The Dow Jones industrial average rose 65.38 points,or 0.64 percent, to 10,241.02, according to the latest data,while the Nasdaq composite index gained 9.25 points, or0.47 percent, to 1,972.04.

But broader diversified market measures fell. The Standard& Poor's 500 index gave up 1.34 points, or 0.11 percent,to 1,180.18. And the Wilshire 5000 index fell 18.07points, or 0.16 percent, to 10,944.49.

Further illustrating the market's negative tone, decliningissues outnumber gainers by 11 to eight on the Nasdaq and by 17to 13 on the New York Stock Exchange.

"I don't think there is much rhyme or reason" forlate-session gains, said Peter Coolidge, senior equity traderat Brean Murray & Co. "Apparently the market just got to alevel where buyers are coming in. We are just making up part ofthe losses from yesterday at this point, so there is nothing toget excited about."

The Microsoft Factor

Gains in Microsoft Corp. shares helped both theDow and Nasdaq. The stock rose $2.02, or 3.13 percent, to$66.50 after it said it is changing how it licenses its Windowsoperating system to computer makers, allowing them to removeits Web browser and make other changes.

The move was in response to a ruling last month by a U.S.appeals court that upheld a finding that Microsoft held amonopoly in PC operating systems and that some of its licensingpractices were illegal, Microsoft said.

Market Movers

But bears were encouraged by disappointing confessions fromyet more companies. This time it was Comverse Technology Inc., among others.

Telecommunications software maker Comverse said it expectsearnings for the fiscal year 2002 to be about 23 percent belowanalysts' expectations as its customers delay purchases inlight of the poor economic climate. Comverse also said earningsfor its quarter ended July 31 will be as much as a third belowexpectations.

Comverse shares tumbled 33 percent, or $13.07, to $25.95.

Compaq Computer Corp. , the No. 2 personal computermaker, gained 69 cents to $14.45 even after it lowered itssecond-quarter forecast on the back of an industry slowdown andincreased job cuts.

Analysts said they hope aggressive cost-cutting programs,such as slashing jobs, will let Compaq improve its bottom linein terms of earnings per share.

DoubleClick Inc. fell $2.04 to $9.98 after the No.1 online ad company said its loss widened within Wall Street'slowered expectations, but revenues would trail forecasts. Itgave few signs of optimism as it still contends with a declinein ad spending.

AOL Time Warner Inc. lost $1.91 to $48.27 on theNew York Stock Exchange. Online advertiser L90 Inc.fell 15 cents to $2.28, and 24/7 Media slipped 1 centto 22 cents.

Pepsi Bottling Group Inc. provided a bright spotwhen the largest bottler of PepsiCo Inc. soft drinkssaid profits climbed, citing growth in bottled water and newPepsiCo products. Shares gained $1.68 to $43.71.

Polaroid Corp. lost 80 cents to $1.90. The cameraand film maker said it was optimistic about talks with itsbanks over looming loan deadlines, but its stock tumbled morethan 34 percent amid concerns the company may be on the brinkof bankruptcy.

Motorola dropped 44 cents to $15.06, while Yahoo lost $1.26to $16.57 before their profit reports, which are expected afterthe bell.

The Associated Press and Reuters contributed to this report -->