Dow Gains 93, Leading Market; Asia Rebounds
The Dow Jones industrial average tacked on another 1% gain Thursday, pushing to a record high on the same day that the Nasdaq composite index closed above 2,000 for the first time.
Meanwhile, Asian stock markets continued to rebound, suggesting growing optimism about Japan’s beleaguered economy. The dollar fell against the yen.
On Wall Street, Thursday was a broken record in more ways than one: Major stock indexes rose to new highs, but the performance of many smaller stocks was lackluster--continuing the market pattern in place since spring.
The blue-chip Dow surged 93.72 points to a record 9,328.19, the first close above the 9,300 mark. The Standard & Poor’s 500 rose 0.8% to a record 1,183.99.
And the Nasdaq composite gained a relatively modest 0.3%, but it was enough to push the index to 2,000.56, the first close above that millennium mark.
In the market overall, losers topped winners by a healthy 17 to 12 on the New York Stock Exchange.
But on the Nasdaq market--home to most smaller stocks--winners had only a small edge over losers, with 2,137 issues up and 2,030 down.
The S&P; small-cap index, a purer measure of small-stock performance, was up just 0.1% for the day. It remains 6% below its spring peak.
Investors’ hunger for big-name stocks doesn’t appear to be waning, even as many of those stocks climb to lofty levels in terms of price-to-earnings ratios, analysts note.
“This is a big-cap extravaganza,” said Larry Wachtel, a market strategist at Prudential Securities.
Still, some analysts note that many smaller stocks are still going in the right direction--up--albeit at a much slower pace than their big-stock brethren.
With second-quarter corporate earnings at many big-name companies looking decent if not spectacular, and with interest rates and inflation still under control, the path of least resistance for those stocks remains higher, many experts say.
The rebound in Asian markets this week also may be helping U.S. market sentiment. In the wake of the Japanese ruling party’s defeat in elections Sunday, Tokyo’s Nikkei-225 stock index has risen every day this week. It gained 0.7% on Thursday to 16,731.
That has helped pull other Asian markets higher. On Thursday the South Korean market soared 5.4%. Hong Kong gained 1.5%.
Meanwhile, the dollar continues to lose ground against the yen and against European currencies. “The tone in the Far East and Russia is clearly one of more optimism,” which has hurt the “safe haven” status of the dollar, said Ned Riley, chief investment officer at BankBoston.
For the same reason U.S. bond yields are inching higher. The 30-year Treasury bond yield rose to 5.72% on Thursday from 5.70% on Wednesday.
Among Thursday’s highlights:
* Apple Computer, whose earnings soundly beat Wall Street’s forecasts, jumped $3.06 to $37.50, boosting Nasdaq.
Also, Tellabs, which makes equipment to transmit data, video and voice signals, gained $6.06 to $84.75 after reporting better-than-expected earnings.
* Drug stocks continued to lead the S&P; 500 higher. Merck, up 31% this year, rallied $1.75 to $138.63; Pfizer, up 58% in 1998, gained $1.81 to $117.81; Schering-Plough, up 70%, climbed $2.88 to $105.50.
* Holding back some of Thursday’s climb was a slump in transportation stocks.
Hardest hit was AMR, the parent of American Airlines, which fell $4.81 to $78.69 amid concerns that the industry’s recent strength may soon peak. Delta dropped $1.63 to $135.50 and Alaska fell $1.31 to $57.
Market Roundup, D8