Stocks mixed, bargain hunters stave off bigger losses

AP Business WriterNEW YORK (AP) -- Investors sold blue chips again Thursday as an investigation of Bristol-Myers' books and another downgrade of General Motors further sapped the market's confidence. But afternoon bargain hunters provided some reprieve, pulling the broader market out of negative territory and allowing the Dow Jones industrials to trim an earlier loss of more than 200 points.

For much of the session, the Dow was poised for its fourth triple-digit loss in as many days.

"It is a bear market. There is not much more you can say. The attitude on Main Street and Wall Street has changed from buying on the (market's) dips to selling on the rallies," said Richard A. Dickson, a technical analyst at Hilliard Lyons in Louisville, Ky.

Snapping back from an earlier 208-point loss, the Dow closed down 11.97, or 0.1 percent, at 8,801.53, according to preliminary calculations. The Dow plunged 566 points over the previous three sessions, and on Wednesday closed below 9,000 for the first time since October.

But the broader market was higher. The Nasdaq composite index rose 28.41, or 2.1 percent, to 1,374.42, having closed Wednesday at a low not seen since May 1997.

The Standard & Poor's 500 index advanced 6.90, or 0.8 percent, to 927.37, having dropped Wednesday to a closing low not seen since November 1997.

The market's comeback was attributable to investors willing to place some bets on stocks with lower prices, and also to program trading, in which computers generate "buy" orders when stocks fall to a specified level. There was no fundamental change in market sentiment to drive the buying.

Bristol-Myers fell $1.04 to $22.11 on news that the Securities and Exchange Commission is investigating whether the drug company inflated revenues last year by $1 billion.

General Motors traded sharply lower for much of Thursday after UBS Warburg cut its rating on the stock to "hold" from "buy," a day after Banc of America downgraded it. GM ended Thursday up 11 cents at $47.72.

Bigger gainers included Kodak, which climbed $2.94 to $29.58 after raising its second-quarter estimates. Wal-Mart rose 42 cents to $54.18 after raising its second-quarter earnings estimate due to stronger-than-expected sales in June.

Yahoo! rose 73 cents to $12.92, having reported Wednesday its first quarterly profit since 2000 and raising its yearly earnings expectations.

Still, investors are expected to keep selling until they see a definite improvement in earnings and until they regain trust in corporate accounting.

"What the stock market needs more than anything is time and no more scandals," said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray.

Analysts say prices also need to drop to the point where investors can shrug off the market's accounting woes and buy stocks.

"We have to get to the point where we say that the values are too good to ignore, and then this crisis in confidence goes away. We're not there yet," he said.

There was no positive economic news to spur buying Thursday. The Labor Department reported wholesale prices inched up 0.1 percent in June, the first increase in three months. But the report on the Producer Price Index, which measures prices before they reach consumers, suggested inflation remains under control.

The department also reported jobless claims rose last week to a six-week high, rising by a bigger-than-expected 16,000 to a seasonally adjusted 403,000. It marked the first increase in three weeks.

Declining issues outnumbered advancers nearly 2 to 1 on the New York Stock Exchange. Volume came to 1.34 billion shares, ahead of 1.13 billion at the same point Wednesday.

But on the Nasdaq, advancers led decliners more than 5 to 3.

The Russell 2000 index, the barometer of smaller company stocks, fell 3.09, or 0.7 percent, to 416.69.

Overseas, markets were sharply lower Thursday with Japan's Nikkei stock average finishing down 2.5 percent. In Europe, France's CAC-40 dropped 4.0 percent, Britain's FTSE 100 slid 4.3 percent, and Germany's DAX index fell 1.7 percent.

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