Dow Touches 9,000, Gives Most of It Back
Blue-chip stocks closed slightly higher Thursday as investors took profits after an early rally, and bonds ended barely changed.
The dollar climbed against the Japanese yen amid concerns that Tokyo may not be ready to tackle economic reforms. But the greenback slipped against the German mark on hopes that foreign aid will help stem Russia’s financial woes.
The Dow Jones industrial average closed up 11.71 points at 8,935.58 after rising 101 points earlier in the session.
Traders said several factors may have triggered the profit-taking, including resistance to a Dow at 9,000, rumors that the Federal Reserve will act to prop up the yen again, and problems with a new chip from bellwether Intel.
“It’s certainly normal to tag 9,000 and take some profits,” said Scott Bleier, chief investment strategist at Prime Charter. “These are just excuses to back off a little after such a ferocious one-week run-up.”
The rally in technology stocks stalled as the Nasdaq composite index, laden with tech issues, fell 14.51 points, or 0.8%, to 1,863.25. The index is still up 4.6% on the week.
* In the broader market, declining stocks led advancers on the New York Stock Exchange by a 4-3 margin in heavy trading. The Big Board composite index fell 1.04 points to 576.14.
* The S&P; 500 fell 3.60 points to 1,129.28 after gaining nearly 30 points over the previous two days. Wednesday’s closing record of 1,132.89 was the first for the measure since April 22.
Blue chips turned volatile at mid-session when the tech rally ran out of steam and Nasdaq slipped into negative terrain.
“The Dow hit 9,000 and a little bit of selling came in,” said Dan Ascani, president of Global Market Strategists. “It’s fairly normal for a market to meet resistance like that, but combined with the techs coming off, it produced some profit-taking. The market is reloading its cannons.”
Investors took comfort that the economy was still sailing along.
Existing homes sales rose 1% in May, a real estate group said, to an annual rate of 4.82 million units, above some economists’ forecasts of a 4.8-million-unit rate.
The benchmark 30-year Treasury bond edged up slightly, barely changing its yield to 5.65% from 5.66% Wednesday.
Some investors expect the market to revive as second-quarter earnings reports begin in the middle of next month. “This earnings season is going to be strong, so I think we’re really in for a summer rally in the stock market,” said Robert Froehlich, chief investment strategist at Zurich Kemper Investments.
Among Thursday’s highlights:
* Among leading Nasdaq names, Microsoft fell $3.38 to $101.56. Sales of its Windows 98 operating system, which went on the shelves Thursday, aren’t likely to repeat the success of Windows 95, analysts said.
* Intel, the No. 1 computer-chip maker, dropped $1.75 to $75.63, as investors fretted over lack of assurance that the glut of personal computers will ease in the second half of the year. Likewise, Dell Computer fell $1.25 to $92.
* AT&T; fell for a second day, losing $1.63 to $58.38 after announcing a $46.5-billion purchase of Tele-Communications Inc. that will hurt earnings for three years. TCI fell 50 cents to $39.25.
* Bed, Bath & Beyond tumbled $6.38 to $49.88. The home-furnishings retailer reported earnings at the low end of analyst expectations.
* Among the movers, 3Com surged $4.38 to $31.50 after beating earnings estimates and announcing a stock buyback.
In currency trading, the dollar stood at 142.30 yen in late New York trading, up from Wednesday’s 141.25 close.
Market Roundup, D6
