Tech Rebound Lifts Market; Yields Inch Up
Stocks closed mostly higher on Thursday, paced by a rebound in key technology stocks, before Motorola dropped its latest earnings bomb on the market.
Bond yields rose ahead of today’s report on May employment trends, and as Britain’s central bank raised interest rates.
On Wall Street, the Dow Jones industrial average jumped 66.76 points, or 0.8%, to 8,870.56 in a rally that gained steam as the session wore on.
The tech-heavy Nasdaq composite index surged 27.64 points, or 1.6%, to 1,769.95.
Analysts said the market was primed for at least a short-term rebound after its slide of recent weeks on worries about corporate earnings.
Computer chip giant Intel, which triggered a sell-off in tech stocks on Wednesday after some analysts trimmed earnings estimates, rose $2.25 to $68.19 on Thursday after the company late Wednesday said it did not plan to warn of weaker-than-expected earnings.
In the broad market, winners topped losers by 1,644 to 1,257 on the New York Stock Exchange and by 2,154 to 1,867 on Nasdaq.
Before the late burst of buying, trading had been rather hesitant with a key economic report--the nation’s unemployment rate for May--due today and no resolution to the mounting uncertainty about how much and how long the Asian financial crisis will hurt American companies.
Bond yields edged higher, with the 30-year Treasury bond ending at 5.81%, up from 5.78% on Wednesday, as some traders sold, fearing a stronger-than-expected employment report.
Also, the Bank of England’s surprise boost in its key short-term interest rate, from 7.25% to 7.5%, bothered some investors. The central bank said it is seeking to combat inflationary pressures. British stocks fell 0.6% on the news.
Meanwhile, oil prices got only a modest lift despite word that Saudi Arabia, Venezuela and Mexico will further cut production to boost prices. Near-term oil futures added just 31 cents to $15.12 a barrel. But Mexico’s stock market got a big boost from the news, surging 3%.
As for U.S. stocks, “I would think the market’s not out of the woods yet. There’s some unfinished business--mainly longer term--on the profit side,” said Charles Pradilla, chief investment strategist at Cowen & Co.
Motorola’s announcement after the close warned of as much, analysts said.
Among Thursday’s highlights:
* Rebounding tech stocks included Microsoft, up $1.75 to $86.01; Netscape, up $2.06 to $24.38; IBM, up $2.19 to $116.06; Dell, up $4.25 to $84.50; and Texas Instruments, up $2.88 to $50.88.
* Oil-related stocks rose after the production-cut announcement. Exxon gained $1.31 to $70.31, British Petroleum jumped $2.38 to $89, Chevron rose $1.19 to $80.13, Baker Hughes gained $1.44 to $37.63 and Atlantic Richfield was up $1.50 to $79.25.
* Some telecom stocks were boosted by the latest merger announcement in that sector, as France’s Alcatel bid for DSC Communications, sending DSC up $7.81 to $27.50. Among other players, Qualcomm rose $1 to $51.25, Advanced Fiber Communications surged $3.63 to $40.13 and Nokia jumped $2.06 to $66.06.
* Northwest Airlines fell $2.81 to $39.81 after warning of weaker-than-expected earnings.
* Some financial issues gained, including SunAmerica, up $1.25 to $51.81, and Lehman Bros., up $2.44 to $74.69.
* Retail issues rose on news of strong May sales. Winners included Gap, up $2.13 to $56.25; TJX, up $1.69 to $48.88; Nordstrom, up $1.44 to $72.94; and Circuit City, up $3.19 to $45.19.
* Cleveland Indians Baseball, which went public at $15 a share on Thursday, traded as high as $15.25 but closed at $14.75.
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Market Roundup, D6
