Trading Volume Soars as Stock Index Records Topple

Another chapter was added to Wall Street’s already thick record book Wednesday, as the Dow Jones industrials zoomed past the 8,000 mark amid frenzied buying.

The rally that powered the Dow up 63.17 points, or 0.8%, to a record 8,038.88 was far stronger among select technology stocks in the Nasdaq market.

The Nasdaq composite index leaped an astounding 38.52 points, or 2.5%, to a record 1,580.63. That was a record point rise, topping the previous record of 34.83 points set May 2, although the latter gain was a slightly larger 2.7% advance.

Nasdaq trading volume of nearly 840 million shares was the second-busiest ever.

But the breadth of the Nasdaq advance was less impressive: Winners topped losers by 23 to 19, a far smaller margin than the 2-1 margin winners had over losers on the New York Stock Exchange.

The Russell 2,000 index, a gauge of smaller stocks, rose 3.83 points, or 0.9%, to a record 410.22, compared with the 1.2% jump in the blue-chip Standard & Poor’s 500.

Still, if the broad market was up less than the biggest names in technology, few analysts were complaining.

“This is a five-star market,” said J. Thomas Madden, chief investment officer for U.S. equities at Federated Investors, which oversees $75 billion. “It’s a time of great exuberance for investors. All mountains have peaks, but the global fundamentals look really good out into the 21st century.”

Indeed, the backdrop for the rally was another favorable batch of economic reports, which in turn pushed long-term bond yields to their lowest levels since December. (Stories, A1 and D3.)

“No bull market ever ends with interest rates going down,” said Larry Rice, investment chief at Josephthal, Lyon & Ross, while still cautioning that “this market is extremely overbought.”

On top of the interest rate decline, investors continue to see robust second-quarter earnings reports from many major U.S. companies, indicating that despite a slower economy in recent months, companies’ earnings power isn’t waning to any significant degree.

Among Wednesday’s highlights:

* Tech issues were fueled in part by Intel’s healthy earnings report, which pushed that stock up $7.47 to $88.38. Other big winners fueling the Nasdaq advance included Microsoft, up $9.97 to $148.44 in advance of its earnings report today; Sun Microsystems, up $3.44 to $45; and Dell, up $6.50 to $147.94.

“There are precious few areas that offer the kind of growth opportunities that these businesses represent,” said Marshall Front, managing director of Trees Front Associates in Chicago.

* Financial-related shares were strong, including Mellon Bank, up $2.19 to $50.25; J.P. Morgan, up $3 to $111; Norwest, up $3.13 to $64.25; and BankAmerica, up $2.50 to $69.13.

* The only major blue-chip disappointment was Eastman Kodak, which tumbled $8.50 to $68.38 on a poor earnings report.

Meanwhile, Latin American markets rebounded dramatically from profit-taking on Tuesday. Brazil’s key market index soared 8.8%; Mexico’s jumped 1.9%.

Markets also were up sharply in Europe but were mixed in troubled Asia.