). Techs, meanwhile, ended relatively flat.
Qualcomm's earnings, which were worse than analysts had expected, kept a lid on Nasdaq strength. The company posted pro forma fourth-quarter earnings per share of $0.20 compared with $0.23 one year ago, despite a 6% rise in revenues. It sees first-quarter EPS of $0.21 to $0.24, on a 5% to 10% sequential revenue rise.
But losses were kept in check with some good news. On Tuesday, Federal Reserve policymakers slashed interest rates for the tenth time this year -- the third time since the September 11 attacks -- in an effort to boost the sagging U.S. economy. Fed officials also left the door open for more cuts in December. The Fed lowered the fed funds rate target by another 50 basis points to 2.0% -- the lowest level in some 40 years.
Though borrowing rates are at record lows, the timing of an economic recovery remains uncertain. However, stocks have gained ground in recent weeks on falling rates and an economic stimulus package from the Bush administration.
Among the stocks in the news Wednesday, tech bellwether and Dow member Hewlett-Packard Co. (HWP
) moved lower as the company ran into some unexpected opposition to its planned merger with Compaq Computer (CPQ
). The Hewlett family, which owns 5% of H-P, continues to oppose approval of the union. H-P, however, says that all of its board members -- with the exception of Walter B. Hewlett -- reaffirmed support for the merger.
Meanwhile, financial services stocks on the Dow -- Citibank (C
), JP Morgan Chase (JPM
), and American Express (AXP
) -- were among the best performers in the blue-chip average.
In economic news, a government report showed that third-quarter productivity rose 2.7%, up from 2.1% in the second quarter. The data were better than expected, but are not expected to have much impact on markets.
The Dow Jones industrial average added 36.88 points, or 0.38%, to 9,554.24. The tech-heavy Nasdaq composite index was up 2.45 points, or 0.13%, to 1,837.53. The broader S&P 500 index was down 3.15 points, or 0.28%, to 1,115.71.
U.S. Treasuries ended higher as all signs continued to point to a murky outlook for the economy. The Fed's uncertain tone in a note accompanying its notice of a tenth rate cut so far this year also boosted buying interest in government bonds. Demand for the 10-year note, one week after the Treasury suspended issuance of the 30-year note, was high even though the Treasury will auction $7.0 billion worth of 10-years Wednesday afternoon.
European markets finished higher as U.S. stocks strengthened. In London, the Financial Times-Stock Exchange 100 index was up 2.20 points, or 0.04%, to 5,216. In France, the CAC 40 added 31.58 points, or 0.71%, to 4,493.27. In Germany, the DAX Index gained 148.35 points, or 3.15%, to 4,856, amid short covering and better than expected results from carmaker BMW.
Asian markets closed lower. Qualcomm's poor results pressured tech shares in Japan while worries over the banking industry there also dragged stocks lower. The benchmark Nikkei average fell 3.28%, or 348.74 points to 10,284.98, its lowest close since Oct. 10. In Hong Kong, the Hang Seng lost 86.26 points, or 0.83%, to 10,269.79, amid worries about a global economic slowdown.