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Wall Street Moves Up Thursday - 2001-08-03

U.S. stock prices moved moderately higher Thursday, in cautious trading. Analysts say investors are still not very comfortable with the outlook for corporate earnings.

The Dow Jones Industrial Average moved up 41 points, less than .5 percent, to 10,551. The Standard and Poor's 500 index eked out a 4 point gain, while the tech-weighted Nasdaq composite extended its winning streak to three days, advancing almost 1 percent.

There was more upbeat news on semiconductors, for the second day in a row. Leading chip maker Intel said business seems to be turning around. Intel expects sales to pick up in the second half of the year, on the strength of back-to-school and holiday shopping.

Meanwhile, latest on the U.S. economy shows more weakness in the manufacturing sector. New orders to factories fell a more-than-expected 2.4 percent in June.

Despite a lack of conviction in the present market, some analysts believe investor psychology may be turning around. Robert Harrington is a broker with UBS Warburg. "I still think we're going to be in a fragile state through the third quarter on the earnings front," he says. "It will be difficult. But I think people are looking for a reason to buy, which was not the case about six months ago."

Greg Smith, an investment strategist for Prudential Securities, says investors really want to believe that the worst days for the economy are almost over. According to him, July's employment report, due out Friday, bears close watching. "If the employment data isn't too bad," he says, "I think investors are going to conclude that the summer is the 'bottom,' and then we have to start thinking about a recovery."

Corporate profits fell more than 15 percent in the second quarter. Experts think the third quarter, while still weak, should be slightly better.