Dow Leaves 10,000 Behind--and Most Shares
20,000 or bust?
The Dow Jones industrials, which just crossed 10,000 for the first time a week ago, rocketed anew Wednesday amid heavy buying of financial services stocks.
The Dow soared 121.82 points, or 1.2%, to a record 10,085.31.
The broader Standard & Poor’s 500 index also hit a new high, adding 9 points to 1,326.89.
The blue-chip gains left the Dow up 9.8% year-to-date and the S&P; up 7.9%.
But the rest of the market couldn’t get out of reverse on Wednesday. Despite the surge in big-name stocks, most issues ended the day lower. Losers topped winners by 16 to 14 on the New York Stock Exchange and by 22 to 17 on Nasdaq.
“The rise in the blue chips masks some underlying weakness in the market,” said Hugh Johnson, chief investment officer at First Albany Corp., echoing a refrain spoken repeatedly on Wall Street in recent months.
Meanwhile, the Nasdaq composite index, which hit a record high on Tuesday as its big technology stocks copy or exceed the gains in blue chips, eased 18.74 points, or 0.7%, to 2,544.43 on Wednesday amid profit-taking in some of those tech issues.
Nasdaq trading was the heaviest since early-February.
The Dow’s advance past the 10,000 mark has been fueled in part by rising optimism that corporate earnings--at least those for the mega-companies--will improve this year after a dismal showing in 1998.
The first-quarter earnings season opened on a buoyant note as Alcoa on Wednesday posted a profit that easily beat Wall Street estimates. The aluminum giant, which also is Dow stock, said its first-quarter results were up 5%. The stock jumped $2.94 to $44.
Financial stocks were the day’s leaders, however. “We’re getting close to quarterly reports, and any excuse to be optimistic will drive these stocks because they still have not caught up after their fall in the fall,” said Robert Albertson, who operates the Pilot Financial investment fund.
Brokerage stocks were red hot. Merrill Lynch soared $5.38 to $96.50, nearing its peak last summer of $109.13.
Among banks, Chase Manhattan jumped $5.13 to $84.38, Citigroup added $4.69 to $71.69, BankAmerica climbed $3.38 to $73 and J.P. Morgan gained $3.50 to $127.44.
Tame bond yields helped boost sentiment on Wednesday.
Still, many analysts worry that the market’s focus on a relative handful of stocks--while most decline--is an extremely unhealthy sign in the long run.
Among the day’s highlights:
* Internet brokers were red hot once again, as the surge in online trading is expected to boost their earnings. Ameritrade Holding leaped $11 to $94.75, E-Trade climbed $8.50 to $84.50 and Charles Schwab rose $8.75 to $116.
* Casino stocks rose after Nevada gambling regulators reported that Las Vegas casinos’ revenue rose more than expected in February. MGM Grand surged $3.38 to $37, Circus Circus advanced $1.56 to $19.06, and Mirage Resorts gained $1.88 to $22.
* Tech stocks were mixed amid profit-taking before the release of Yahoo’s quarterly earnings after the close. Yahoo declined $6.44 to $208.44 before reporting surprisingly robust profit.
In the Net sector, Audiohighway.com catapulted $14.75 to $32.13 on optimism about the future of audio content on the Net.
Infospace.com jumped $21.88 to $111.50 as the content provider approved a 2-for-1 stock split for stockholders of record April 19.
Among new Net issues, Rhythms NetConnections rocketed $48.06 to $69.06 after the company, whose products help provide high-speed access to the online world over ordinary phone lines, raised $196.9 million before expenses in an initial stock sale.
On the downside Network Associates plummeted $5.94 to $16 after the maker of security software warned that its first-quarter profit will fall short of estimates because of weakening demand.
* GM slid $4.38 to $86.69 after a weak sales report.
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Market Roundup, C7
