Dow Posts 3rd Straight Gain With Late Rally
Bargain hunters looking for deals ignited a burst of late-day buying Tuesday, erasing a 35-point loss and sending stocks higher for a third straight session.
The Dow Jones industrial average rose 29.63 points to 7,037.83--a finish second only to the all-time high of 7,067.46 set a week earlier.
Helping fuel the Dow’s gains Tuesday were 3M, up 3 1/2 to 90; J.P. Morgan, up 2 5/8 to 109 1/4; and IBM, up 2 5/8 to 146 1/2. Some of those gains were offset by Philip Morris, down 1 7/8 to 133 1/4, and Procter & Gamble, down 1 5/8 to 123 1/4.
Broad-market indexes also ended higher, including the Nasdaq, which has been battered in the last week by a sell-off in technology stocks.
“This is a resilient market,” said Larry Wachtel, vice president at Prudential Securities Inc. “If the market gives investors a buying opportunity, they will buy.”
Investors, however, remained cautious with their trades ahead of Federal Reserve Board Chairman Alan Greenspan’s testimony to Congress today.
Bond prices have almost stood still since Thursday as traders wait for Greenspan’s next comments about interest rates. Fear that Greenspan might express some urgent concern about inflation pressures from a tight labor market and healthy economy may have helped weaken demand at Tuesday’s auction of two-year notes, traders said.
The Treasury sold $17.5 billion of two-year notes at an unexpectedly high yield of 5.885%, but down from 5.984% at the last auction Jan. 22.
Demand also was weaker than the average at the last 10 auctions. Five-year notes are to be auctioned today.
The yield on the Treasury’s main 30-year bond nudged up to 6.66% from 6.65% late Monday.
Also Tuesday, the Investors Intelligence newsletter reported that of 140 advisors surveyed last week, the percentage who said they were bullish about the prospects for stocks fell to 46.2% from 49.2% the week before and 54.2% the prior week.
About 53.8% described themselves as bearish, or said they foresee a correction--a drop in prices of about 10% during a 12-month period.
That compares with 50.8% a week earlier and 45.8% two weeks earlier.
Among Tuesday’s highlights:
* Buying interest in retail stocks propped up the market.
A number of major chains reported better-than-expected results for the fourth quarter and year-end. Home Depot rose 2 7/8 to 55 1/8, Wal-Mart rose 1 3/4 to 26 3/8 and Limited rose 1/2 to 18 1/2.
* Centennial Technologies rose 10 1/4 to 14 3/4 on the New York Stock Exchange after the company said its business had improved in recent weeks. The company’s stock fell more than 80% last week after it said some of its financial results could be phony.
* Networking leader Cisco Systems dipped 2 1/2 to 56 1/2 after warning that declining capital spending and the strong dollar were eroding sales growth in some of its foreign markets.
* EchoStar Communications rose 8 3/4 to 26 3/4 on the news that Rupert Murdoch’s News Corp. will buy a 50% stake for $1 billion. [Story, D4.]
Market Roundup, D6
