The Atlanta Journal-Constitution Wall Street Column

By Tom Walker, The Atlanta Journal-Constitution

Feb. 6–A six-session rally by the Nasdaq composite index ended Monday on weakness in the technology sector. Investors generally treaded water after recent market gains, fueled in part by double-digit corporate profit growth.

Microsoft was the most heavily traded tech stock, falling 1.9 percent in the wake of a Barron’s report that the computer maker’s shares may decline after release of its Vista system. But gains by Hewlett-Packard, IBM and Intel helped boost the Dow Jones industrial average.

Other Dow winners included Wal-Mart Stores, on a better-than-expected January sales report, and aircraft maker Boeing, following news that package deliverer UPS has ordered 27 air freighters worth between $3.9 billion and $4.2 billion.

The Institute for Supply Management’s January index of service industries posted a better-than-expected advance to 59.0 percent — an eight-month high — from 56.7 percent in December. Wachovia economic analyst Adam York noted that the service sector continues to outperform manufacturing, driving much of the overall U.S. economic expansion.

The Dow transportation average pulled back from Friday’s record high just above 5,000. A dual high of both the Dow transportation and Dow industrial indexes is favorable, indicating products are getting to U.S. markets by road, rail and air.

“We do not see significant warning signals for an economic downturn and see little reason to be bearish on the U.S. equity market at this juncture,” Citigroup chief strategist Tobias Levkovich said Monday in a message to clients.

Thomson Financial said fourth-quarter earnings have expanded at a 10.4 percent rate with 75 percent of Standard & Poor’s 500 companies having reported. That will be the 14th consecutive quarter of double-digit growth if it holds.

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