Tech Stocks Up, but Earnings Still a Concern; Oil Prices Drop

Technology stocks rebounded and most major market indexes closed higher Thursday, in advance of today’s report on June employment trends.

But earnings jitters still dogged the market, one day after two major software companies added to the list of companies warning that second-quarter results will be below expectations.

In commodities trading, oil prices continued to slide, reflecting expectations that Saudi Arabia will boost output soon.

On Wall Street, the Nasdaq composite index gained 97.47 points, or 2.5%, to 3,960.57 on Thursday, recovering most of Wednesday’s 128-point slide.

The Dow industrials, however, eased 2.13 points to 10,481.47, after falling 77 points Wednesday.

Rising stocks outnumbered losers by 4 to 3 on the New York Stock Exchange and by about 21 to 19 on Nasdaq, in moderate trading.

IBM helped pull the Dow lower, after a Bear Stearns analyst trimmed his second-quarter earnings estimate to 97 cents a share from $1.02, citing worries that some customers may be delaying mainframe computer purchases to wait for a new machine IBM plans for later this year.

IBM fell $3.75 to $101.25, the lowest since March 7.

Late Tuesday, mainframe software company Computer Associates warned of weaker quarterly results. Its shares dived $21.69 on Wednesday, though they inched up $1.31 to $30.75 on Thursday.

BMC Software, another software firm issuing a warning Wednesday, saw its shares plunge $14.19 that day. They slipped 25 cents to $21.06 on Thursday.

Still, earnings-tracking services say the number of companies warning about earnings problems so far is nothing out of the ordinary.

In the bond market, Treasury yields were modestly higher in advance of the government’s report today on June employment trends. The data may help shed more light on whether the economy is indeed slowing.

The 10-year T-note yield edged up to 6.04% from 5.98% on Wednesday. The 1-year T-bill ended at 6.08%, up from 6.04%.

In commodities markets, near-term oil futures in New York sank further, losing 68 cents to $29.99 a barrel. The price fell $1.83 on Wednesday.

Reuters reported that a plan announced Monday by Saudi Arabia to boost oil production is on track. Expectations are that the Saudis and other producers may raise production by as much as 500,000 barrels a day to keep prices below $30 a barrel.

Among Thursday’s highlights:

* Semiconductor shares rebounded after plunging Wednesday following downbeat comments about the sector from a Salomon Smith Barney analyst. Intel gained $5 to $136.63, Advanced Micro Devices rose $2.25 to $77.50, Applied Micro Circuits leaped $18.06 to $118.88 and Vitesse Semiconductor rose $4.81 to $74.06.

Among other tech shares caught in Wednesday’s downdraft, Oracle rose $3.31 to $75.63, Adobe Systems jumped $7.25 to $134.94 and Applied Materials rose $3.25 to $86.69.

* Many health maintenance organization shares rallied in the wake of PacifiCare’s announcement Wednesday that it will drop unprofitable Medicare patients. PacifiCare surged $5.31 to $57.19, Cigna gained $2.13 to $97.13 and Oxford Health surged $2.56 to $24.75.

* Biotech shares were mixed. Immunex jumped $6.06 to $62.38 and Biogen rose $4.19 to $73.50, but Incyte Genomics fell $2.13 to $92.94 and Regeneron lost $1.13 to $28.94.

* Energy stocks were mostly higher after diving Wednesday. Exxon Mobil rose $1.25 to $78.19, Chevron added $1.06 to $83.56 and Phillips jumped $2.88 to $50.13.

In foreign trading, the Mexican market pulled back again after its hot rally early this week, after the election of conservative party candidate Vicente Fox as president. The IPC index fell 0.9% to 7,306.14.

On the NYSE, Telmex fell $1.13 to $62.75.

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Market Roundup, C7-8