NEW YORK - Bargain-hunting and news of an unsolicited bid for AT&T's cable TV business helped revive blue chip and technology stocks Monday, pushing the major indexes higher after a weeklong slump.
The gains were moderate, though, reflecting investors' unwillingness to make big moves ahead of upcoming second-quarter earnings reports.
"People are waiting because they're worried. There's a lot of fear there could be more slowness in the economy," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co.
The Dow Jones industrial average closed up 46.72 at 10,299.40, its first advance in a week. The broader market also closed higher, with the Nasdaq composite index rising 22.55 to 2,026.71, and the Standard & Poor's 500 index gaining 8.19 to 1,198.78.
Analysts put little stake in the gains, however, noting that investors remain rattled after warnings from more than 720 companies that second-quarter results will fall below expectations. They say that before many investors will make a substantial commitment to the market, they must see real proof that the economy and company earnings are indeed turning around. That means better earnings - and more concrete predictions of when business will improve.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange. Consolidated volume came to 1.23 billion shares, compared with 1.04 billion Friday.
Continental plans stock offering
HOUSTON - Continental Airlines announced Monday it intends to make an initial public offering of stock in its commuter subsidiary, Continental Express.
The company said it intends to file the paperwork with the Securities and Exchange Commission later this week. Continental spokeswoman Julie Gardner declined to comment further on the issue.
Citing unidentified sources, The Wall Street Journal reported that Houston-based Continental plans the sale with an eye toward eventually spinning off ExpressJet Holdings Inc., which does business as Continental Express.
The company's reasoning, the sources said, is that the stock market has favored shares of fast-growing, highly profitable small airlines over those of the major carriers.
A divestiture of Continental Express would allow the commuter airline to fly 70-seat regional jets. Under the labor agreement with Continental Airlines' pilots, Continental Express' pilots cannot fly anything larger than 60-seat aircraft.
Consumers keep hands in pockets
WASHINGTON - Consumers, worried about their jobs in the face of layoffs, were a bit tightfisted in May, borrowing money at the slowest pace in 19 months.
Consumer credit rose by a seasonally adjusted $6.5 billion in May, or a 4.9 percent annual rate, the Federal Reserve reported Monday. That was a much smaller increase than the $9.5 billion rise in credit that many analysts had forecast.
The 4.9 percent growth rate was the slowest since a 4.7 percent rate of increase registered in October 1999.
May's pace of borrowing was less than half the pace of April, when total consumer credit rose at a revised 10.5 percent rate, or by $13.7 billion.
The slowdown in borrowing "reflects job insecurities and the impact of actual layoffs, which are making consumers more cautious," said Paul Taylor, the chief economist at the National Automobile Dealers Association.
To stave off a recession, the Federal Reserve has cut interest rates six times this year, driving down borrowing costs as a way to spur consumer spending and business investment, a strategy designed to bolster economic growth.