Investors Cautious Amid Earnings Jitters

N E W  Y O R K, June 4, 2001 -- Stocks rose withlate-session buying of blue chips breaking the day's narrowtrading range after investors were reassured by comments oninflation from America's top central banker.

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But amid the lightest trading day of the year, gains in thebroader market were held down by persistent concerns aboutcorporate profits.

The Dow Jones industrial average rose 71.57 points, or 0.65percent, to 11,061.98, according to the latest data, while theNasdaq composite index added 6.53 points, or 0.30 percent, to2,155.97. The benchmark Standard & Poor's 500 index was up 6.45points, or 0.51 percent, to 1,267.12.

"It's very quiet out there today," said Lisa Lynch, headtrader at New York-based Orbitex Management Inc. which manages$1 billion. "Earlier there were Greenspan comments about thetaming of inflation and that's why we were up (more strongly)this morning, but some investors are holding back beforeanalyst meetings."

Earlier in the day, Federal Reserve Chairman Alan Greenspanbolstered investors' optimism after he told delegates at theInternational Monetary Conference in Singapore that he did notsee inflationary pressures in the United States.

In addition, investors worried about what companies willsay during analyst meetings worried some investors, traderssaid. Top online retailer Amazon.com Inc. is expected topresent to analysts on Tuesday, while leading chipmaker Intelwill address analysts on Thursday.

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Cypress shares were slightly higher, despite anannouncement that its earnings and revenues would be lower thanexpected amid stalled hopes for recovery in the batteredcomputer chip sector. The gain of 61 cents to $22.21 indicatedthe company's warning had largely been expected, traders said.

A report showing sales of semiconductors were battered thisyear by weakening demand for electronics buffeted the sector.The Philadelphia Stock Exchange's Semiconductor index slipped 0.98 percent after the Semiconductor IndustryAssociation said worldwide sales dropped 4.7 percent in Aprilfrom the month before.

Shares of Cisco Systems , the world's biggestInternet gear maker, gained 75 cents to $19.60 after sourcesclose to Cisco said the company was not in talks to buy U.K.telecommunications equipment maker Marconi Plc .

Modest support came Monday from oil-related stocks,which got a boost from buoyant crude oil futures. NYMEX crudeoil futures rose as Iraq halted exports in a dispute with theUnited Nations and top-oil producing nations sent mixed signalsabout whether they would be willing to fill the output gap.

The American Stock Exchange's Oil Index climbed 1.48percent. Oil services giant Exxon Mobil rose $1.32 to$90.27, underpinning the blue-chip Dow average.

Oil refiner Valero Energy Corp. rallied $2.46 to$47.19 after it said it expects second-quarter earnings toexceed its previous expectations because of strong profitmargins for its products.

News of acquisitions bolstered stocks of companies thatsaid they would be bought for more than their current shareprice.

Audio and video retail chain Tweeter Home EntertainmentGroup Inc. said Monday it agreed to buy SoundAdvice Inc. in a move that would increase its storecount and position it as the No. 1 U.S. specialty retailer.Tweeter shares fell $3.03 to $25.72, while Sound jumped $8.44to $23.44.

In other corporate news, Pitney Bowes Inc., the officeequipment maker best known for its postage meters , andHewlett-Packard Co. said Hewlett, the world's top makerof desktop computer printers, agreed to pay $400 million toPitney Bowes to settle a 1995 patent suit. H-P gained 41 centsto $29.66, and Pitney rose 48 cents to $40.10.

Friday’s Highlights

On Friday, stocks rose as a late-session rally on asurprising drop in the nation's jobless rate and a calmingoutlook by General Motors overtook early selling oncontinued weakness in the manufacturing sector.

The Dow Jones industrial average climbed 78.47 points, or0.72 percent, to end at 10,990.41, while the Nasdaq compositeindex gained 38.95 points, or 1.85 percent, to 2,149.44. Thebenchmark Standard & Poor's 500 index rose 4.85 points, or 0.39percent, to 1,260.67.

The Associated Press and Reuters contributed to this report