Broad Market Gains Ground Despite Dow
Stocks ended broadly higher Friday even as major blue chips dipped. But an earnings warning from Compaq Computer after the market closed could make for rough going on Monday.
The Dow industrials eased 23.86 points to 10,173.84, but most other indexes closed higher, with the Nasdaq composite up 0.8% to a record 2,593.05.
Wall Street initially tumbled after Russian President Boris Yeltsin warned NATO not to push Russia into the Kosovo conflict, saying that would risk a world war.
The Dow was off as much as 103 points early on. But buyers quickly rushed back in.
Some investors said Yeltsin can’t have much effect on the market, whatever he says. “His power to rule the country is questionable, so market reaction is muted,” said Joanna Segal, a New York-based manager with Bank Hapoalim.
As trading wore on, Internet, airline, energy and retail stocks were in demand.
Overall, winners topped losers by 17 to 13 on the New York Stock Exchange and by 21 to 18 on Nasdaq.
A calm bond market again aided stocks. The 30-year Treasury bond yield edged up to 5.46% from 5.44% on Thursday, but was down from 5.6% a week ago.
Wall Street had been buoyed on Thursday by the European Central Bank’s decision to cut its key interest rate to 2.5% from 3%. Surprisingly, most European stock markets on Friday didn’t get a huge lift from that surprise news.
The German market jumped 1.1%, but French stocks were up 0.8% and British stocks gained 0.5%. The Italian market fell 1.1%.
Even with Friday’s decline, the Dow was up 341.33 points, or 3.5%, for the week and is up nearly 11% since Jan. 1. The S&P; jumped 4.2% for the week, while the Nasdaq composite advanced 4%.
Next week, first-quarter earnings reports will be the market’s primary focus. Compaq’s news late Friday could mean a rocky opening on Monday, traders said.
Among Friday’s highlights:
* Airline stocks surged after Continental Airlines’ announcement that it raised its fares. Continental Class B shares closed up $3.06 to $40.88, Delta Air Lines gained $4.25 to $71.56 and UAL climbed $1.88 to $78.94.
* Internet stocks were hot, as usual. Theglobe.com soared $19.94 to $78.94. The Internet service provider announced a 2-for-1 stock split late Thursday.
Inktomi gained $27.56 to $132.19 on expectations of strong quarterly earnings and speculation the Internet software maker could be acquired.
Investors also snapped up more Net-related initial stock offerings, including ITurf, the teen clothing and chat site. It went public at $22 Friday and rocketed to close at $57.44. USInternetworking went public at $21 and closed at $57.50.
* Vitesse Semiconductor slumped $6.63 to $51 on concerns about profit uncertainty for the maker of chips that speed up telecommunications products.
* Pulling the Dow down was Union Carbide, off $3.31 to $48.06, after Morgan Stanley cut its rating for the chemical company. Analysts have dismissed the latest takeover rumors involving the company.
* Bank stocks were mixed after strong gains Thursday. BankAmerica slipped 50 cents to $74.38.
* Florida Panthers Holdings climbed $1.88 to $9.50 after the owner of the Florida Panthers hockey team and several hotels said fiscal third-quarter earnings rose to 70 cents a share, beating the 61-cent average estimate of three analysts polled by First Call.
Market Roundup, C4
