Growth, Tech Stocks Recoup; Industrials Hit
Major growth and technology stocks rebounded Tuesday after Monday’s dramatic sell-off, while profit-taking hit many industrial shares that had surged over the last week.
Wall Street closed mixed overall, with key indexes gaining but losers topping winners by 17 to 14 on the New York Stock Exchange. Trading volume eased from Monday’s extreme levels.
The Nasdaq composite, which plummeted 138.43 points, or 5.6%, on Monday, recouped almost half that loss with a 64.03-point, or 2.7%, gain Tuesday. The index closed at its high for the day.
The Dow industrials inched up just 8.02 points to 10,448.55, after losing 53 points Monday. Fresh buying of many big growth stocks in the Dow was offset by declines in heavy-industry shares.
After Monday’s carnage--the third-biggest one-day Nasdaq loss of the 1990s--”people said, ‘Whoa, maybe that’s enough; maybe there are some bargains’ ” among computer-related shares, said Eric Efron, co-manager of USAA Aggressive Growth Fund.
Sun Microsystems, which fell $4.81 on Monday, gained $4.25 to $54.38 on Tuesday. It still is down 25% from its recent peak.
Intel rose $1.06 to $56.56 and Dell gained $2.75 to $38.19. Microsoft rose $2.13 to $83.13 in advance of its earnings report.
Internet issues also bounced back after Monday’s plunge. America Online surged $12.81 to $128.69, Yahoo rose $7.31 to $171 and Doubleclick leaped $24.19 to $128.19.
Many smaller stocks, however, couldn’t sustain their recent rally. The Standard & Poor’s index of 600 smaller stocks eased 0.2%.
Analysts said Tuesday was a “consolidation” day for the market and that the issue of which sector--growth or industrial--is likely to lead the market could take days to become clear.
Among Tuesday’s highlights:
* Drug stocks helped lift the growth sector, buoyed by strong earnings from Johnson & Johnson, which surged $6 to $96.25. Other classic growth stocks gaining included Wal-Mart, up $2.88 to $47.75, and Amgen, up $8.06 to $69 ahead of its profit report.
* Among industrials, Alcoa slid $1.81 to $52.88, Illinois Tool Works lost $5.19 to $74.06 and Caterpillar eased $1.06 to $60.69.
* Asian markets, among the world’s strongest in recent months, were mixed Tuesday after Wall Street’s steep losses Monday. European markets suffered more, with the German market down 2.6% and British stocks off 3%.
Market Roundup, C10
