Beaten-Down Techs Buoyed by Bargain Hunters
Stocks ended mixed Tuesday as investors shifted out of safe-haven blue chips and bid up some of the battered technology shares.
The Dow Jones industrial average slid 31.13 points, or 0.35%, to 8,891.24.
In the broad market, declining issues led advances 1,497 to 1,433 on active volume of 595 million shares on the New York Stock Exchange.
The technology-laced Nasdaq composite index rebounded 14.97 points, or 0.86%, to 1,761.79 after Monday’s plunge of 32 points on fears that the economic turmoil in Asia and other emerging markets will dent U.S. tech firms’ profits.
Some analysts said the rebound in the influential technology sector may be short-lived.
“There’s a bit of a ‘dead cat bounce’ going on,” said Arnie Owen, managing director of capital markets at Cruttenden Roth. “But overall, it’s fear and loathing in technology land. This is selective buying as tech heads into the summer dead zone.”
Wall Street was a little less jittery over the financial crisis overseas.
The Japanese yen rallied from a seven-year low against the dollar, helped by speculation that the Group of Seven industrialized countries may consider a concerted effort to rescue the embattled currency during their meeting in Paris next week.
Also, Russia’s stock market jumped 12% on hopes of a G7 support package for Russia. The recovery followed Monday’s collapse of more than 10%.
Meanwhile, U.S. Treasury Secretary Robert Rubin said the impact of Asia’s financial crisis on U.S. trade is starting to grow, but the effect on the economy as a whole is small.
Bond prices fell for the first time in four days as companies including Time Warner Inc. and Tyco International Inc. prepared to sell up to $17 billion in debt in coming weeks.
The yield on the benchmark 30-year Treasury bond rose 2 basis points to 5.79%.
The dollar fell to 138.83 yen in late New York trading from 139.70 Monday.
Dell Computer was one of the key computer stocks that helped push the Nasdaq higher as it rebounded from Monday’s slide. Dell closed up $4.31 at $82.63.
Intel recovered from the previous day’s slump, which came on news that the Federal Trade Commission’s top litigator has recommended the agency sue Intel for alleged antitrust violations. The stock closed up $1.25 at $69.25.
The Standard & Poor’s composite index of 500 stocks rose 2.05 points to 1,093.03. The American Stock Exchange index was off 1.21 points at 706.30.
The NYSE composite index of all listed common stocks rose 0.21 point to 565.35.
The Wilshire Associates Equity Index--a compilation of the market value of NYSE, American and Nasdaq issues--was 10,300.766, up 20.867 points, or 0.20%.
Among Tuesday’s market highlights:
* Vesta Insurance Group plunged $24.69 to $28 after the company said it was conducting an internal probe into accounting irregularities that are likely to affect its previously reported earnings for the past two quarters. Robert Huffman, Vesta’s president and chief executive, resigned. The stock did not trade Monday.
* Avon Products ended off $1.75 at $79.56 after sliding as low as $74. The beauty-aid maker told analysts that the shutdown of its Chinese business hurt second-quarter revenues.
* Baxter International fell $1.88 to $54.88 on news that it has suspended the European clinical trial of its HemAssist blood substitute in patients suffering from severe trauma.
* Ciena Corp. rose more than 12% on takeover rumors and news that its customer, Sprint Corp., will launch a new communications network. Ciena was up $6.19 at $57.56.