Boeing scandal offsets Dow boost from technology shares

US TECHNOLOGY shares made the running yesterday as wireless technology company Qualcomm raised its profit outlook and network equipment builder Cisco Systems rose after a favourable article. But blue chips were kept in check after a troubling top-level management shake-up at Dow component Boeing.

Acquisitions and mergers in banking and defence contracting and weaker oil prices helped to mitigate losses.

Cisco rose 1.4 per cent, or 25 cents, to $18.29 after Barron’s said the company remains a powerhouse in its core business.

But aeroplane maker Boeing fell after its chief executive was fired. The shares fell 0.3 per cent, or 15 cents, to $58.23 after the company announced it had fired Harry Stonecipher for having an affair and violating the company’s rules.

The Dow Jones industrial average closed down 3.69 points, or 0.03 per cent, at 10,936.86. The Standard & Poor’s 500 index finished up 3.19 points, or 0.26 per cent, at 1,225.31. The technology-laced Nasdaq Composite index was up 19.60 points, or 0.95 per cent, at 2,090.21.

The Dow average was near 11,000, its highest level in more than 3 years as stocks built on Friday’s rally, which was fuelled by a better-than-expected jobs report and relief that the Federal Reserve was unlikely to step up the pace of interest-rate hikes.

Qualcomm rose 5.8 per cent, or $2.07, to $37.57 after the company said that quarterly profit would be slightly better than expected on strong chip shipments.

Shares of Texas Instruments, the world’s largest maker of chips for cell phones, were up 2.3 per cent, or 61 cents, to $27.50 ahead of results.

Intel rose nearly 2.4 per cent, or 55 cents, to $25.23. The world’s largest chip maker will update its first-quarter financial targets on Thursday.

In merger and acquisition action, Capital One Financial fell nearly 3 per cent, or $2.26, to $75.82 after the credit card issuer said that it had agreed to buy Hibernia, a Louisiana bank, in a cash and stock deal worth about $5.3 billion. Hibernia jumped 21 per cent, or $5.62, to $32.19.

Shares of United Defence soared 26 per cent, or $15.13, to $73.39 after BAE Systems, Europe’s biggest defence company, agreed to buy it.

McDonald’s rose nearly 1.2 per cent, or 39 cents, to $34.35 after Prudential Equity Group raised its investment rating on the hamburger joint.

EUROPE: The share indices closed lower yesterday. Shares in Euronext jumped to a life high and closed up 4.2 per cent on hopes that it will avoid a costly takeover battle for the LSE, while Deutsche Brse shares closed down 2.6 per cent.

The FTSEurofirst 300 index of pan-European blue chips closed 0.1 per cent weaker at 1,107, having touched a fresh 33-month peak of 1,109.5.

The broad DJ Stoxx European index ended down 0.1 per cent at 267.7 on the fifth anniversary of its all-time peak of 408. This week also includes the anniversary of the Stoxx’s all-time low - 162 points on 11 March 2003.

French utility Suez was one of the top blue-chip gainers, adding 1.7 per cent after its Electrabel subsidiary reported solid results and a sharp increase in dividends.

Compatriot Air Liquide rose 2.8 per cent as Dresdner upgraded it to "add" from "hold".

ASIA: Most markets closed higher yesterday, stimulated by a strong showing on Wall Street last week. Japan’s Nikkei 225 Average made its eight straight day of gains for the first time since August 1999. The Nikkei added 52.31, or 0.44 per cent, to 11,925.36 - its highest close since finishing at 12,004.29 on 28 April, 2004.

Gainers included Hitachi, Kyocera and Canon as well as banks Sumitomo Mitsui and Mitsubishi Tokyo.

Sony jumped 1.5 per cent after its board of directors replaced the company’s chief executive. The move was prompted by Sony’s struggling core electronics business.

Around the region, South Korea’s Kospi index erased earlier gains and dropped 0.5 per cent to 1,007, on reports that the president, Roh Moo-hyun, will accept finance minister Lee Hun-jai’s resignation due to his alleged involvement in real estate speculation.

In Hong Kong, the blue-chip Hang Seng index rose 0.30 per cent to 13,771.95, Singapore’s Straits Times index climbed 0.5 per cent to 2,166, China’s Shanghai Composite index gained 0.5 per cent to 1,293 and Taiwan’s Weighted Price index added 0.4 per cent to 6,220. Australia's S&P/ASX 200 index was up 0.4 per cent at 4,238.