WIRE: 04/09/2001 2:56 pm ET

U.S. stocks edge upward as Nasdaq recovers

By Elizabeth Lazarowitz

NEW YORK (Reuters) - Stocks eked out modest gains in late afternoon trading Monday, as the Nasdaq market shook off its losses, but investors were treading cautiously ahead of this week's slew of earnings reports.

The market got an early boost after Web retailing giant Amazon.com Inc. forecast a smaller-than-expected loss, giving investors an incentive to dip a toe back into the market, but by afternoon, the rally had largely faded.

"We're getting into earnings, and I think that that is causing investors to be nervous," said John Davidson, chief investment officer at Circle Trust Co, which oversees $8 billion, adding that the volatility seen in recent sessions could continue. "These are uncertain times."

The earnings reporting period heats up this week, and analysts are anticipating more bad news to come as the slowing U.S. economy grinds down corporate profits.

The tech-laced Nasdaq Composite Index was up 3.15 points, or 0.18 percent, at 1,723.51, after earlier jumping more than 2 percent with the Internet sector and Amazon in the lead. But weakness in semiconductors capped its gain after Lehman Brothers soured on sector leaders like Intel Corp. .

The blue-chip Dow Jones industrial average was up 9.40 points, or 0.1 percent, at 9,800.49, but its gain was capped by Intel, which fell 90 cents to $22.72, as well as computing giant International Business Machines , down $2.75 at $95.20. Intel earlier slumped to a 52-week low of $22.25.

The broad Standard & Poor's 500 Index added 2.38 points, or 0.21 percent, to 1,130.81.

The market appeared to be pausing for breath after a week of gut-wrenching volatility as its slumped under the weight of a slew of high-tech profit warnings and then soared when computer giant Dell Computer Corp. said it stood by its first-quarter forecasts.

"Investors really have very little conviction, and very little confidence that any of these rallies will hold, particularly in the face of a quiet Federal Reserve and a rather noisy earnings announcement period coming up," said Ned Riley, chief investment strategist at State Street Global Advisors in Boston.

The market had an upbeat start to this holiday-shortened trading week as Amazon, citing strong growth in electronics, said its loss is expected to be less than $255 million and eyed revenues of more than $695 million. Analysts had expected revenues of $669.6 million. Amazon surged $2.72 to $11.09; and its shares pulled in a rise of more than 40 percent at one point.

Yahoo! Inc. , which reports its results on Wednesday, added 31 cents to $15.12. The American Stock Exchange Internet index was up 1.44 percent, reflecting gains by the likes of eBay Inc. and Check Point Software Technologies .

The U.S. stock market will be closed for the Good Friday holiday.

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-- Anonymous, April 09, 2001