FINANCIAL MARKETS : Rally Pushes Dow Up 22.48 to 4,011.05
The U.S. stock market re bounded Tuesday, sending the Dow Jones industrial average back over the 4,000 mark.
After hovering near its starting point for most of the session, the Dow advanced decisively in the last 90 minutes of trading to finish at 4,011.05, up 22.48 points and within one point of the record closing mark of 4,011.76 set Friday.
The gain almost erased Monday’s drop of 23.17 points, which was partly related to jitters following the surprise collapse of Britain’s Barings brokerage on Sunday.
Stocks were helped by yet another rally in the bond market, after an early selloff. Long-term Treasury bond yields ended at new six-month lows, with the 30-year T-bond yield falling to 7.44% from 7.47% on Monday.
The bond market shook off a Chicago-area purchasing managers report that contained hints of inflation, traders said. Other economic news Tuesday provided more evidence of a slowing economy, which has driven bonds’ recent rally.
In the stock market, technology stocks--the market’s recent leaders--zoomed with a new flurry of buying, helping pace the broad market’s advance.
Advancing stocks beat declining ones by about 7 to 3 on the New York Stock Exchange, where volume came to 317.6 million shares.
In the Nasdaq market of mostly smaller stocks, the composite index soared 9.23 points to 793.73, fueled by tech stocks’ advance.
Rebounds in Asia’s major financial centers also helped restore stock buying interest here, analysts said.
Tokyo’s 225-issue Nikkei average closed at 17,053.43, up 244.73 points after plunging 3.8% on Monday, partly on news of Barings’ failure.
In Hong Kong, the Hang Seng index rose 192.57 points to close at 8,319.22, more than recouping Monday’s 1.1% fall.
London’s FTSE-100 index eased 16.0 points to 3,009.30 while Germany’s DAX index added 2.93 points to 2,102.18.
Among Tuesday’s highlights:
* Tech stocks were lifted in part by news that Korea’s Samsung Electronics is buying a 40% stake in computer maker AST Research. AST surged 1 13/16 to 16.
Other tech winners included Motorola, up 2 to 57 1/2; Apple, up 1 1/4 to 39 1/2; Adobe Systems, up 2 to 35 3/4; Compaq, up 3/4 to 34 1/2, and America On-Line, up 2 3/4 to 71.
* German chemicals giant Hoechst and Dow Chemical said they are in talks on the possible sale to Hoechst of all of the outstanding shares of Dow’s Marion Merrell Dow affiliate for $25.75 a share. Dow gained 2 3/8 to 67; Marion Merrell rose 1 to 24 7/8.
* Thousand Oaks-based biotech giant Amgen rocketed 3 3/4 to 69 after it received a license to develop products based on an “obesity gene” discovered by Rockefeller University.
* Morgan Stanley rose 1 1/4 to 67 3/8 after the brokerage posted fourth-quarter earnings that were stronger than expected.
* CBS surged 2 5/8 to 64 5/8 in response to news that Turner Broadcasting has expressed renewed interest in acquiring the network. Turner Class A shares rose 3/4 to 18 3/4.
* Wal-Mart rose 3/8 to 23 3/4 after it reported record earnings.
* National Gypsum soared 4 3/4 to 49 1/4 after receiving a $1.1-billion takeover offer.
* On the downside, Quantum Health Resources fell 6 3/4 to 22 after reporting earnings that disappointed Wall Street analysts.
* Mexican stocks traded in the U.S. rebounded with a rally in Mexico City, though analysts said the bounce was technical. Grupo Televisa rose 1 1/4 to 16 1/2 and Grupo Tribasa rose 3/8 to 5 7/8. Telmex inched up 1/8 to 27 after trading as high as 28 1/8.
