U.S. stock prices remained under pressure Wednesday. The "blue-chips" managed to eke out a modest gain. But fresh fears over a slower-than-hoped-for recovery in corporate earnings dampened the technology sector. The Dow Jones Industrial Average went up 35 points, less than half a percent, to 10,033. But the tech-weighted Nasdaq composite dropped two-thirds of one percent. The broader Standard and Poor's 500 index lost a point.
Software giant Microsoft reaffirmed its earnings targets going into next year. That news lifted the Dow Industrials but did little else for the sagging market. Analysts say bad corporate news outweighs the good news.
Pip Coburn from the UBS Warburg brokerage firm. "For every one or two data points for a Microsoft or something like that, we're getting 10 or 20 on the flip side of the coin," he said. "Analysts around the Street are really taking their numbers down, finally taking their numbers down for 2002. The optimism is being blown out of the space."
Investment firm Merrill Lynch cut its rating on number two cell phone maker Motorola, citing a weak business environment. It also downgraded French telecom firm Alcatel, after Alcatel said it would have a hard time meeting its earnings forecast for the year.
Meanwhile, Wall Street remained skeptical about the planned merger of computer companies Hewlett-Packard and Compaq. Their shares dropped for a second day, closing at five-year lows.
Hewlett-Packard announced plans Tuesday to buy Compaq in a $20 billion stock deal.
Not even a glimmer of positive economic data could rally the market. The latest figures show U.S. productivity grew strongly in the second quarter, despite a sluggish economy.
Many experts concede robust growth in the U.S. economy and in the stock market before the downturn in 2000 has driven stock valuations excessively high. Analysts predict a sobering few months ahead for Wall Street.