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Tone of market is guarded at best

Stocks end week mixed amid profit warnings, low prices

NEW YORK — Enticed by bargain prices and heartened by the possibility of a tax cut, investors did some tentative buying Friday, limiting most of their purchases to safer blue chips.

Comments by Federal Reserve Chairman Alan Greenspan, who told Congress he favors income tax cuts to reduce federal budget surpluses, helped boost some stocks. Still, another set of profit warnings, including one from software maker Oracle, reminded the market it could be some time before earnings and the economy show signs of substantial improvement.

The Dow Jones industrial average rose 16.17 to close at 10,466.31 after gaining as much as 129 points and falling as much as 148 during the session. For the week, the Dow gained 24.41, a 0.2 percent increase.

Broader market indicators, which include many riskier tech stocks, fell. The NASDAQ composite index lost 65.74 to finish at 2,117.63, a level not seen since December 1998. The NASDAQ lost 6.4 percent for the week, giving up 144.88.

The Standard & Poor's 500 index declined 7.05 to 1,234.18, slipping 11.68, or 0.9 percent, for the week. The S&P — with more than a third of its components in tech stocks — is now down 20 percent from the high of 1,552.87 it reached a year ago, which analysts say is a sign that the bear market has spread to the broader market from the technology sector.

Analysts didn't expect any of Friday's gains to last, and they described investors as cautious. The careful buying was due to the fact that stocks are cheaper following their most recent dive, not because the outlook for profits or the economy has improved.

"Until investors have more confidence that we are not going to get blindsided every day by a new wave of companies giving us bad news, the tone of the market will stay as it is — guarded at best," said Hugh Johnson, chief investment officer for First Albany Corp.

Defensive stocks — called that because they fare better in a bear market — accounted for much of the Dow's advance. Philip Morris climbed $1.15 to $49.70, while Procter & Gamble rose $1 to $69.65.

The Dow's tech components were mostly lower. Hewlett-Packard, however, gained 52 cents to close at $29.52.

Among other big tech stocks, Gateway fell 30 cents to $15.45 and Dell rose 56 cents to $22.06.

Analysts saw hope in the fact that some tech stocks moved higher while others recovered some of the steep losses they incurred on profit warnings from big-name companies like Oracle.

"People were worried that we might get another leg down in the NASDAQ, because of yet another warning from one of the glamor tech stocks, and that just didn't happen," said Richard A. Dickson, a technical analyst at Scott & Stringfellow in Richmond, Va.

Software maker Oracle, which issued a profit warning late Thursday, fell nearly 21 percent, down $4.50 at $16.88.

Tech stocks' mixed day came from investors being torn between the lure of lower prices and fear generated by earnings warnings, Dickson said.

While investors are afraid the NASDAQ is going to keep sliding, Dickson said, they're also thinking, "What if these thing have hit the bottom and I missed the boat?"

Advancing issues outnumbered decliners about 5 to 4 on the New York Stock Exchange. Volume was 1.48 billion shares, down slightly from 1.51 billion on Thursday.

The Russell 2000 index gained 3.58 to close at 476.88.

Overseas markets were mostly lower. Japan's Nikkei stock average fell 3.3 percent, Britain's FT-SE 100 lost 0.8 percent, and France's CAC-40 declined 0.9 percent. But Germany's DAX index gained 0.6 percent.