The earnings reports that began pouring in this past week were supposed to help guide the market out of its malaise _ or at the very least, provide Wall Street with some direction. Instead, the major stock indexes have made little progress and investors seem just as befuddled about whether now is the time to buy.
That's to be expected, say analysts, who contend that until more companies can say business is improving and the technology sector shows signs of a revival, any market advances will be incremental.
"We just need to know that the drought is beginning to lessen, the blood bath is ending, We're starting to hear that a little bit, but . . . investors have become more conservative. They need to hear more," said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray. "I think the most realistic outcome when earnings are finished will be that we flatline."
The indexes came close to that this week, with the Dow Jones industrials and Standard & Poor's 500 index ending within 1 percent of where they started. The technology-focused Nasdaq Composite Index finished down nearly 3 percent, despite sessions that saw tech stocks reverse course daily.
The Dow on Friday ended down 33.35 at 10,576.65. The Nasdaq fell 17.22 to 2,029.37, and the Standard & Poor's 500 index, Wall Street's widest measure, slipped 4.17 to 1,210.85.
All three measures are well above their lows for 2001, which analysts say means the market is building a base from which to advance. But they remain below where they started the year: The Dow is off 2 percent, the S&P 500 down 8 percent, while the technology-focused Nasdaq has dropped nearly 18 percent.
Still, the picture gets a little rosier, when investors look beyond the indexes. The Dow, Nasdaq and S&P 500 have significant technology components, making their overall results vulnerable to the ongoing hemorrhaging in that sector.
A look at non-technology issues suggests that investors have been doing some nibbling _ albeit very selectively, but enough to push some stocks consistently higher.
"Regional banks, housing, specialty chemicals are all moving forward," said Larry Wachtel, market analyst at Prudential Securities. "But no one ever talks about it. They're all focused on the indexes, which are ruled by technology."
Some examples: The stock of homebuilder Pulte Corp., for example, has more than doubled in the past 52 weeks. Gas and chemical company Air Products & Chemicals and regional bank Fifth Third Bancorp are up about 50 percent over the same period.
These aren't broad sector moves, though.
"It's on a stock-by-stock basis," said Belski, the US Bancorp strategist. "That's okay, though. It's a sign that investors are doing their homework, and that's good for the market long term."
He's also pleased with broader markets' overall performance, especially considering the week's string of disappointing news from technology bellwethers including Microsoft, Sun Microsystems and Intel.
Microsoft met earnings expectations but issued a profit warning for the next quarter because of weak personal computer software sales.
Sun Microsystems beat analysts' reduced expectations, despite a 20 percent drop in revenue. But officials refused to speculate on whether the company has hit bottom. And Intel also bested earnings estimates but suggested weak revenues are ahead.
Analysts say technology _ and the broader market _ will stay under pressure until investors decide to start buying and holding again. No one knows exactly when that will happen, but increasingly the guesses are centering on early 2002.
"We've had underwhelming results so far this quarter combined with the very tentative guidance for the future. The only positive thing in all this is that the market is not testing its lows," said Philip Dow, managing director of equity strategy at Dain Rauscher Wessels.
For the week, the Dow rose 37.59 points, or 0.4 percent, while the Nasdaq slipped 55.42 or 2.7 percent. The S&P 500 index lost 4.83 for the week, a 0.4 percent drop.