Tech Earnings Take Dow to 2nd Straight High
The Dow Jones industrial average closed at a second consecutive record high Wednesday, boosted by big technology companies’ earnings.
Bond yields edged lower while the dollar was mixed.
The Dow gained 52.07 points to close at 9,162.27.
The technology-heavy Nasdaq composite marched to a new high. And the Russell 2,000 index of smaller companies also closed at a record high, rising 2.27 points to 487.12, beating the April 2 mark of 486.43.
Most broad-market indicators closed higher after struggling much of the day before turning higher near the close.
The Standard & Poor’s 500 stock index rose 3.57 points to 1,119.32, moving within easy striking distance of the April 3 record close of 1,122.70.
The New York Stock Exchange composite index rose 1.46 points to 582.77, less than a point shy of the April 6 record of 583.17.
Holding true to their warnings in early March, Intel and Compaq Computer stepped forward late Tuesday and early Wednesday, respectively, with anemic results for the first three months of the year. Wall Street analysts, however, had slashed their forecasts so much over the last month that the final tally for both companies topped most estimates.
The flow of first-quarter profit reports also remained fairly encouraging outside the technology group Wednesday.
Investors seemed to ignore the latest economic data that showed inventories of goods on shelves and back lots posted the biggest increase in five months. Stockpiles jumped 0.6% to a seasonally adjusted $1.05 trillion in February, the Commerce Department said.
Economists were uncertain, though, whether the buildup was planned or involuntary.
The price of the 30-year Treasury bond rose, lowering its yield, which moves in the opposite direction of the price, to 5.88% from Tuesday’s 5.90%.
“There is no bad news on the horizon and, in the absence of that, people are looking to juice their returns,” Doug Myers, vice president of equity trading at Interstate/Johnson Lane, said.
Investors were shopping for less pricey stocks.
“There is a very clear rotation into economically sensitive and technology stocks out of the defensive and financials,” said Guy Truicko, portfolio manager at Unity Management. “It’s becoming clear that Asia is not as bad as everyone had thought, and the economies in the United States and Europe are strong.”
Among Wednesday’s highlights:
* Earnings at technology bellwethers Compaq and Intel met Wall Street’s expectations, and analysts said it was encouraging that both companies hoped to be doing better by the second half of the year.
Intel, which supplemented its report with a plan to slash costs by cutting 3,000 jobs, traded higher most of the day before finishing $1.13 lower at $74.88. Compaq rose 56 cents to $26.63.
Elsewhere in the tech group, IBM rose $3.50 to $109.75 and Hewlett-Packard rose $2.81 to $63.75 as two of the Dow’s biggest gainers. Microsoft rose $2.94 to $91.38 and Cisco Systems rose $3 to $70.69 to lead the Nasdaq advance.
Overseas, Tokyo’s Nikkei stock average rose 0.1%, Frankfurt’s DAX index rose 0.3%, and London’s FTSE-100 fell 0.5%.
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Market Roundup, D8
