Nasdaq, Russell Set Records; Dow Off 44
The Nasdaq market set its first record high in a month Friday as smaller-company stocks continued to draw money away from the blue-chip sector, which was jostled by growing worries about third-quarter corporate profits. Bond yields rose.
The Dow Jones industrial average fell 44.83 points to 7,822.41, trimming its gain for the holiday-shortened week--which began with Tuesday’s record-setting 257-point leap--to 199.99.
The Dow was off as much as 81 points Friday afternoon but reversed course when Alan Greenspan--the widely criticized yet widely respected chairman of the Federal Reserve Board--publicly dismissed a rumor that he was ill and planned to resign.
Broader stock measures finished mixed. The Russell 2,000 index of smaller companies closed at a record high for the seventh consecutive session.
The blue chips took an early hit after several well-known companies warned of disappointing results for the current quarter and Smith Barney, citing profit concerns, downgraded consumer products giants such as Procter & Gamble, Colgate-Palmolive and Gillette.
“It was the predictability of the earnings stream that gave people confidence to pay what some considered excessive” prices for such stocks, said Charles White, portfolio manager at Avatar Associates.
The Dow index jumped higher from the opening minutes, along with bond prices, after a weaker-than-expected report on August job creation eased worries that the Fed, the nation’s central bank, would raise interest rates soon.
The government said the economy added 49,000 jobs in August, compared with an upwardly revised 365,000 new jobs in July. The unemployment rate edged up to 4.9% from 4.8% in July.
Stocks retreated after profit-taking hit bonds.
The yield on the key 30-year Treasury bond rose to 6.63% from 6.60% on Thursday.
Advancing issues outnumbered decliners by a 7-5 margin on the New York Stock Exchange, where trading was brisk.
The Standard & Poor’s 500-stock list fell 1.82 points to 929.05, and the NYSE composite index fell 0.47 point to 484.64.
But the Nasdaq composite index rose 11.14 points to 1,635.77, beating the Aug. 6 record of 1,630.44.
The Russell 2,000 rose 3.33 points to 433.04. The small-company index has now risen for 10 consecutive sessions, advancing nearly 4% over that span.
Among Friday’s highlights:
* Procter & Gamble slid $3.44 to $133 as the Dow’s weakest component.
* The big decliners on the NYSE were dominated by the companies that issued profit warnings: Tupperware fell $6.69 to $28.44, Boston Scientific fell $13.25 to $62.63 and American Standard fell $4.13 to $41.
* Nasdaq was boosted by Dell Computer, up 63 cents to $87.31.
Overseas, Tokyo’s Nikkei stock average rose 0.2%, Frankfurt’s DAX index rose 0.7%, and London’s FTSE-100 rose 0.1%.
Market Roundup, D3
