For awhile on Friday it looked like the market was going to give investors a break to end a trading week roiled by news of more corporate financial scandal. But a mid-afternoon slump erased earlier gains, and when the final bell rang, stocks ended up about where they began.
The Dow Jones fell 30.67, or 0.3%, to 9239.25, while the S&P 500 and Nasdaq clung to narrow gains. The S&P inched up 0.82 to 991.46, while the Nasdaq climbed 3.4 to 1462.6, a scant gain of 0.2%. The Internet Stock Index, or ISDEX rose 2.1 to 107.2.
The top story on Wall Street Friday was news that copier company Xerox Corp. had overstated revenue by billions of dollars since 1997. Xerox made the restatement as part of a settlement with the Securities and Exchange Commission, for which the company paid a $10 million civil penalty.
The accounting irregularities had increased Xerox’s pretax profits by $1.5 billion over the past five years. Company shares fell Friday 13.4% to $6.93 in heavy trading.
Meanwhile, WorldCom on Friday began laying off the first of 17,000 employees, or one out of every five workers, in an effort to save cash to avoid bankruptcy.
The No. 2 long-distance telephone company in the U.S. rocked markets worldwide when it disclosed Tuesday that it had inappropriately booked $4 billion in revenues. WorldCom is seeking additional lines of credit to make pending debt interest payments. Trading in WorldCom shares was halted Wednesday.
Security software provider NexPrise soared $1.25 to $5 per share Friday, a gain of 33.4%. On Tuesday the company announced new business application software for manufacturers.
Streaming media and entertainment provider RealNetworks rebounded from a tough Thursday, gaining 0.57 to $4.07, an advance of 16.3%. After downgrading its earnings outlook, RNWK fell 18% on Thursday. The company has lost more than 50% of its value in June.
The biggest loser of the day was health-care software maker Eclipsys , which plummeted 45% to $5.44 after announcing that earnings would not meet previous estimates.