Dow Slips Post-Rally; Nasdaq at New High
Stocks closed broadly but modestly lower Monday amid a shake-up at Coca-Cola and an earnings warning from US Bancorp, but Internet stocks led Nasdaq to a new high.
In other trading, crude oil rose more than 3% after Saudi Arabia, the world’s top producer, said it saw no need for OPEC to boost supply before it meets in March to reconsider its limits on exports.
Gold prices slid further--falling for a sixth straight session--after the Netherlands said it will sell 300 metric tons of bullion reserves over the next five years.
On Wall Street, the Dow Jones industrials, which include Coke, fell 61.17 points to 11,225.01, with Coke losing $3.72 to $64.61.
The Nasdaq composite, however, rose 25.38 points to a record 3,546.01.
But losers still topped winners by 22 to 19 on Nasdaq and by 19 to 11 on the New York Stock Exchange.
Analysts said a modest decline in the broad market was to be expected Monday, with some investors collecting their gains from the market’s stellar performance last week.
On Friday, stocks surged, lifting the Dow 247 points to finish within 40 points of its closing record of 11,326.04 reached Aug. 25.
“This is a normal bout of profit-taking,” said Scott Bleier, chief investment strategist at Prime Charter Ltd. in New York.
Stocks’ declines may have been limited by stability in the bond market. Yields eased across the board after surging in recent weeks. The yield on the 30-year Treasury bond slid to 6.24% from 6.26% on Friday on optimism that the November wholesale inflation report, due at the end of this week, will be tame.
“Given the absence of core inflation, it’s easy to expect bond yields to continue to be driven down” to 5% or lower a year from now, said Robert Balentine, who bought Treasuries and municipal bonds in recent weeks for the $3 billion he oversees at Balentine & Co. in Atlanta.
In currency trading, the euro posted its biggest gain yet against the dollar as a stronger-than-expected German manufacturing report boosted expectations for growth in Europe’s largest economy.
In only its third increase in the last two weeks, the euro gained 2.3% to $1.022, from $1.002 on Friday in New York. Earlier Monday, it fell as low as $0.9992--the third consecutive day that the currency dipped below $1.
Near-term oil futures, meanwhile, rose 85 cents to $26.66 a barrel in New York after Saudi oil minister Ali al-Naimi said in Cairo that there is “noticeable stability” in the oil market--a sign the Saudis aren’t planning to raise output.
“The Saudi statements are a big deal,” said Bill O’Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. They open “the door for $30 oil.”
Gold fell $3.60 to $276.40 an ounce in New York, lowest since late September. Although the Dutch sale announced Monday is part of previously announced plans by European central banks to reduce their gold reserves by 2,000 tons, it raised fears that more sales will follow, sooner than later.
Many foreign stock markets continued to streak higher, including Hong Kong, up 2.1%; France, up 0.8%; and Spain, up 1.3%.
Among Monday’s highlights:
* Yahoo led Net stocks higher, rising $27.81 to $280.13, ahead of its debut in the Standard & Poor’s 500 index. Other Net stocks climbing included Inktomi, up $13 to $158, and America Online, up $2.63 to $81.
Red Hat, a leading seller of the Linux operating system, soared $31.13 to $232.13 after Dell Computer agreed to install Linux on its PowerEdge servers.
* Semiconductor stocks rallied anew, with Motorola gaining $6.63 to $130.63 and Texas Instruments up $5.94 to $107.13.
* Telecom shares also continued to advance, with Qualcomm gaining $10.31 to $394.75, Nokia up $14 to $176 and L.M. Ericsson up $4.31 to $59.31.
* US Bancorp’s warning sent its shares down $9.50 to $25.63. Other losers included Bank of America, down $2.09 to $55.34; Wells Fargo, down $1.44 to $45.75; and PNC Bank, down $4.13 to $51.06.
* Drug stocks were broadly lower. Lilly slid $2.38 to $69.50 and Schering-Plough fell $1.69 to $47.88.
Market Roundup, C16
