Wall Street report: Friday close

SECOND thoughts about how quickly the US economy is recovering sent investors into the weekend in two minds.

Selected Blue Chips benefited from a jobs report showing a mixed picture of the economy, although much of the Dow Jones Industrial Average's 36.47 point or 0.36% gain to 10,271.64 came from just one company.

Techs were another story with the Nasdaq Index sinking 19.72 points or 1.10% to 1,770.03 on new concerns about their ability to boost profits in what appears to be a recovery less robust than appeared just a few days ago.

Both indices had rallied at the opening bell after Washington reported that the US economy created 58,000 jobs in March, the first time jobs were added in eight months. But it also reported that the unemployment rate, at 5.5% in February, rose to 5.7%.

William Sullivan, senior economist at Morgan Stanley, said the figures took the pressure off the Federal Reserve to raise rates immediately, a potential plus for share markets. 'This report shows a gradual recovery process is unfolding,' he said. 'Clearly there is some evidence that this is only a modest recovery.'

But the flip side of that argument is that slower growth could limit the ability of companies to raise prices and events in the Middle East could help pinch off a recovery, especially if oil prices continue their march higher. Labor Secretary Elaine Chao said that events of the past few days in the Middle East were 'injecting a great deal of uncertainty' into the US economy. 'Rising oil prices are causing concern,' she said.

St. Louis-based investment firm A.G. Edwards told its clients that the worst fall-out from the Middle East might be over in the short run. 'The market is short term oversold and we believe the Mideast has passed its intensity peak as a market negative,' the firm said. 'We believe oil prices have topped out...'

But even a decline in oil prices on Friday failed to calm fears that some of the strength seen in economic data in February had waned by the end of last month. Continued profit warnings in the tech sector fed into the belief that that sector could not expect a rapid rebound in profits.

McData, which makes computer storage equipment, plunged $3.11 or 26% to $9.06 after its numbers fell short of analyst expectations. EMC, one of the biggest data storage companies, was marked down 59 cents or 5% to $11.12.

And persistent rumors that IBM had an important disclosure to make sent its shares sinking $3.59 or 3.6% to $97.25. The company, which has had its accounting questioned in the wake of Enron's collapse, denied that it had scheduled a meeting with analysts.

Cisco Systems fell 72 cents or 4.3% to $16.15, Microsoft surrendered an early gain to close down 58 cents or 1% to $55.87 and Intel slid 54 cents or 1.8% to $30.05.

Blue Chips were helped by a surge in 3M, which makes Scotch tape and Post-It notes. 3M said that its quarterly results would either meet or exceed expectations and its shares leapt $7.81 or 6.8% to $121.97.

Aluminium maker Alcoa, another component of the Dow, rose $1.12 or 3% to $38 as it reported an expected 46% plunge in profits. Among other Dow stocks, American Express added 55 cents or 1.4% to $40.70, Caterpillar firmed $1.95 or 3.5% to $56.36, DuPont rose 80 cents or 1.8% to $46.50 and Home Depot tacked on 62 cents or 1.3% to $48.77.