Tech Stocks Regroup, Lead Wall St. Higher
The stock market showed no interest in repeating history on Monday, as stocks rebounded after a serious drubbing last week.
The Dow Jones industrial average gained 74.41 points, or nearly 1%, to 7,921.44, after falling 2.5% last week in a rout triggered by concerns over third-quarter corporate earnings.
The Nasdaq composite index, whose many tech stocks were particularly hard-hit last week on earnings worries, rose 18.60 points, or 1.1%, to 1,685.45 on Monday, after losing 4.2% last week.
Trading volume shrank on the Big Board even as winners topped losers by nearly 2 to 1. The low volume suggested many investors were unfazed by last week’s losses--despite the many reminders in the media that today marked the 10-year anniversary of the stock market crash.
Stocks were helped by some healthy corporate earnings reports Monday, by another surge in takeover activity, and by strength in AT&T; shares as the company made a long-expected appointment of a new chief executive.
Also, many tech stocks closed higher. Strength in that sector, which was blindsided by last week’s earnings disappointments from the likes of Intel and Sun Microsystems, was unexpected--coming before Monday’s third-quarter earnings reports from IBM and Microsoft, both of which reported results after the market closed.
Both IBM and Microsoft exceeded Wall Street’s estimates.
Small-company stocks, which last week suffered their biggest overall decline since early August after rallying powerfully in recent weeks, also rebounded Monday. The Russell 2,000 index of smaller stocks rose 1% to 453.85. It lost 3.4% last week though still is up 25% year-to-date.
Indeed, despite the recent profit-taking in many stocks, broad market indexes remain up sharply for the year. The Standard & Poor’s 500 index is up 29% year-to-date.
Many analysts say concerns over earnings have been overblown and that results still are quite healthy. (Talk of the Street, D4.)
Among Monday’s highlights:
* Earnings reports lifted Eli Lilly $1.88 to $64.63, Hasbro $1 to $28.38, Sherwin-Williams $1 to $29 and Robert Half Intl. $2.06 to $40.13.
* Energy stocks helped drive the rally. Exxon rose $1.38 to $65, Atlantic Richfield jumped $3.94 to $84.38 and Western Atlas surged $3.50 to $91.81.
* Soaring airline stocks boosted the Dow transports index 0.9% to 3,282.68.
* In the takeover arena, ITT rocketed $5.38 to $75.75 after getting a “white knight” bid from Starwood Lodging. And HSN surged $3.25 to $41.88 after agreeing to buy most of the TV assets of Universal Studios.
* Among tech shares, IBM rose $2.06 to $97.50 and Microsoft added 38 cents to $132.63 in advance of their earnings reports.
Other tech shares moving higher included Intel, up $1.06 to $84.06; Dell, up $2.38 to $97; Adobe Systems, up $2.44 to $50.31; and Creative Computer, up $2.19 to $16.19.
* AT&T; helped boost the Dow, rising $2.31 to $47.50 as the company confirmed the choice of its new CEO.
In the bond market, yields closed mostly unchanged, with the 30-year Treasury bond yield easing to 6.42% from Friday’s 6.43%.
In foreign trading, many Asian markets suffered renewed selling, led by the Taiwanese market, after that country became the latest to succumb to currency devaluation.
Taiwan’s main stock index dove 4%, while Hong Kong’s market sank 4.6% and South Korea’s slumped 3.4%.
Meanwhile, many Latin American markets followed the U.S. market higher. Argentina’s main index gained 2.7% and Mexico’s rose 0.7%.
