Wall Street report: Wed close

AN early rally in Blue-chips fizzled as Sun Microsystems warmed up techs.

The Dow Jones Industrial Average, which had dropped more than 400 points in the previous two sessions, surrendered an early gain to close lower by 46.84 points or 0.51% to 9,075.14. The Nasdaq Index, down more than 5% this week, clawed back 22.79 points or 1.37% to 1,690.20, roughly where it stood on the day before aircraft ploughed into the twin towers of the World Trade Centre.

Washington helped spark the early re-bound when it reported that the Gross Domestic Product fell 0.4% in the June to September quarter, less than the 1% slide economists had expected. The extent of the decline, the first in eight years, suggested that the US economy might not be in as as much trouble as feared. The US economy had grown 0.3% in the second quarter.

Sun Microsystems, the networking computer giant, helped fire up the tech sector when it said its orders were running ahead of levels of a year ago. The surprising disclosure sent Sun Microsystems shares jumping 61 cents or 6.4% to $10.15. Other tech leaders went along for the ride in the early going, but some had surrendered all their gains by the close. Intel finished the day ahead 88 cents or 3.7% to $24.42, Microsoft slid 73 cents or 1.2% to $58.15, IBM lost 58 cents or 0.5% to $108.07 and Cisco Systems held on to a gain of 35 cents or 2.1% to $16.92.

But some analysts were wary about the rally, given that it was based in part on preliminary economic figures which are often radically revised at a later date. 'I'm not sure this rally has legs,' said veteran market analyst Art Cashin of UBS PaineWebber. 'With all the geopolitics and heightened alerts, people aren't buying them with both hands.'

A big tech loser was Adobe Systems, which makes computer publishing software. Its shares tumbled $2.35 or 8.2% to $26.40 as it said it was cutting 150 jobs or 5% of its workforce to cope with the downturn. NextCard, the online credit card company, plummeted $4.48 or 84% to 87 cents after it said it was undercapitalised and looking for a buyer after booking significant credit losses. NextCard shares were trading at $53 in late 1999.

Qwest Communications, the fourth biggest local telephone company, shed $3.05 or 19% to $12.95 on a dimming profit outlook. Eastman Kodak tumbled $2.23 or 8% to $25.27 as Moody's lowered the photographic company's debt rating. Lockheed Martin, which won the $200bn. (138bn. pound), joint fighter jet project from the Pentagon last week, tacked on 77 cents or 1.6% to $48.77.

Ford firmed 15 cents or 0.9% to $16.05 a day after it replaced its chief executive officer and indicated it would launch an overhaul of its operations. Among Dow components, Walt Disney rose 43 cents or 2.4% to $18.59, Wal-Mart added 80 cents or 1.6% to $51.40 and Honeywell rose 85 cents or 3% to $29.55.