Techs Lead Broad Advance; Dow Up 117
Wall Street’s recovery gained steam Tuesday, as soaring technology stocks ignited buying across the market.
A modest rally in bonds--as the dollar rose--also helped stocks.
The Nasdaq composite index, heavy with big tech names, jumped 38.75 points, or 2.2%, to 1,844.57.
The blue-chip Dow industrials rose 117.33 points, or 1.4%, to 8,828.46.
More important, winners topped losers 1,834 to 1,200 on the New York Stock Exchange and 2,272 to 1,899 on Nasdaq, indicating a spreading of interest in the market.
Beleaguered smaller stocks got a decent lift, as the Russell 2,000 index of small shares rose 1.3%.
“The prevailing philosophy in the stock market right now is that every dip is a buying opportunity,” said Byron Wien, chief U.S. investment strategist at Morgan Stanley, Dean Witter, Discover & Co. “And this past dip is proving to be another one.”
Stocks have been hammered in recent weeks by worries about second-quarter earnings, the dollar’s strength and Asia’s deepening economic slump.
But with the end of the quarter approaching, many portfolio managers once again appear eager to use whatever cash they have to load up on favorite stocks.
The Nasdaq index, which fell 10.5% from its peak of 1,917.61 on April 22 to its recent low of 1,715.75 on June 15, now has rebounded 7.5% from that low.
The Dow, which peaked at 9,211.84 on May 13, fell 6.3% to its recent low of 8,627.93 on June 15, and has rebounded 2.3% since.
Tech issues, which have been battered by earnings fears and by the government’s antitrust actions against Microsoft and Intel, were led higher Tuesday by Microsoft, which rocketed $4.94 to a record $100.75.
A federal court threw out a preliminary injunction that had barred Microsoft from packaging its Internet browser with its Windows operating system.
“It removes one of the long-standing clouds that has overshadowed Microsoft,” said Eric Wiegand, senior money manager at First Capital Group. The company’s global market dominance, visibility and liquidity “continues to make it desirable in the eyes of investors,” he said--even at a stock price-to-earnings ratio of 61.
In other markets, bonds rallied as the dollar rose again. The 30-year Treasury bond yield dipped to 5.64% from 5.66% on Monday.
The Treasury sold new two-year notes at a yield of 5.50%.
The dollar rose to 139.15 yen in New York from 138.16 on Monday, amid expectations Japan won’t act quickly to revive its banking system. Early today in Tokyo, the dollar hit 140.55 yen.
The ruling Liberal Democratic Party on Tuesday renewed discussing ways to repair the country’s crumbling banking system, including creation of a bank to take over the assets and outstanding loans of failing institutions.
Among Tuesday’s highlights:
* Surging tech shares included Intel, up $1.38 to $75.25; IBM, up $3.63 to $111.75; Dell, up $5.25 to $93.13; Hewlett-Packard, up $2 to $59.25; and Yahoo, up $8.50 to $148.06.
* Cable stocks zoomed, partly on speculation about a bid for Tele-Communications Inc. by AT&T.; TCI soared $3 to $38.69, Cablevision leaped $7.25 to $62 and Comcast gained $2.38 to $39.75.
Among other telecom issues, PairGain surged $2.63 to $19.13. Qualcomm rose $1.19 to $51.56.
* Energy stocks rose as crude oil jumped ahead of today’s meeting of the Organization of Petroleum Exporting Countries. The group will discuss new production cuts to boost oil prices.
Exxon gained $1.19 to $71.81; Helmerich & Payne jumped $1.19 to $24.31; Chevron rose $2.31 to $84.06.
* Airlines were weaker on prospects for higher energy costs. Delta fell $2 to $123.81 and Continental lost $1.19 to $58.31.
