Stocks drift after big runup last week, as investors await bevy of earnings reports due this week.
October 6, 2003: 11:39 AM EDT
NEW YORK (CNN/Money) - U.S. stocks hugged the breakeven line at midmorning Monday, unwilling to budge much following last week's big rally and ahead of this week's plate of earnings.
About two hours into the trading session, the Dow Jones industrial average (up 8.89 to 9581.20, Charts), the Standard & Poor's 500 (up 1.59 to 1031.44, Charts) index and the Nasdaq composite (up 4.30 to 1884.87, Charts) all traded a few points higher, led by the Nasdaq. Volume was light, due to the absence of many investors as a result of the Yom Kippur holiday.
"Today is kind of a rest day. There's no economic news and a lot of people are out because of the Jewish holiday.," said Peter Green, a market analyst at MKM Partners. "The big cap techs are kind of drifting, the advance/decline line isn't very good and European markets are weak. There's just no big catalyst right now ahead of the earnings later this week."
Stocks surged last week, rallying especially strongly Friday after the release of a stronger-than-expected monthly employment report, which showed a rise in payrolls for the first time in eight months.
Although trading was likely to remain light throughout the day, investors' focus this week will shift toward the third-quarter earnings season as the first spate of reports from a variety of companies, including Dow components Alcoa (AA: up $0.20 to $28.35, Research, Estimates) and General Electric (GE: up $0.15 to $30.97, Research, Estimates), hits later in the week.
Monday's newsmaking stocks included Motorola (MOT: up $0.93 to $13.21, Research, Estimates), which rallied nearly 7 percent after the company said it would separate its semiconductor unit into a separate publicly traded company and focus on its core businesses.
Business software maker PeopleSoft (PSFT: up $0.69 to $20.50, Research, Estimates) climbed 3 percent after it said third-quarter profit and revenue will top its earlier forecasts as a result of improved demand for its software. The company recently purchased J.D. Edwards and is in the process of fending off a hostile takeover bid from Oracle (ORCL: up $0.21 to $12.19, Research, Estimates).
Shares of chipmaker Rambus (RMBS: up $6.68 to $25.41, Research, Estimates) gained 22 percent in active Nasdaq trade after the Supreme Court threw out Infineon Technologies' appeal of a ruling dismissing its fraud charges against Rambus. The Supreme Court also revived Rambus' patent-infringement suit against Infineon and sent the case back to a lower court.
Securities trading firm Knight Trading (NITE: up $1.67 to $13.77, Research, Estimates) surged 11 percent also after it said it would report third-quarter earnings that would top estimates due to improving stock market trading volume.
On the downside, regional drugstore chain Duane Reade (DRD: down $3.24 to $13.87, Research, Estimates) tumbled more than 17 percent after warning that the major blackout that shut down a significant portion of the Northeast in August would lead to its third-quarter earnings per share coming in at about half of what analysts had expected. The company also lowered its full-year estimates significantly.
Market breadth was positive with advancing stocks edging decliners four to three both on the New York Stock Exchange, where 360 million shares traded, and the Nasdaq, where volume came in at 530 million shares.
Treasury bonds were flat, pushing the 10-year note yield up to 4.20 percent. The dollar gained versus the yen, but eased versus the euro.
NYMEX light sweet crude oil futures gained 13 cents to $30.53 a barrel. COMEX gold rallied $3.10 to $373.10.
European markets were mixed in afternoon trade there. Asian stocks ended mostly higher following the surge in U.S. markets Friday.
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