Big Techs Boost Indexes but Broad Market Falls
Major tech stocks lifted both the Dow industrials and the Nasdaq composite on Wednesday, but the indexes’ gains masked another decline in the broader market.
Soaring demand for Microsoft and Intel pushed those stocks up 10% and 9%, respectively. In turn, the Nasdaq composite jumped 1.4% to 3,621.95, recouping part of Tuesday’s 2.4% sell-off.
The 30-stock Dow--to which Microsoft and Intel were just added in November--rose 65.15 points, or 0.6%, to 11,225.32.
But falling stocks outnumbered winners by 24 to 18 on Nasdaq and by about 17 to 14 on the New York Stock Exchange.
Trading volume on Nasdaq was the fourth-heaviest ever, at 1.638 billion shares.
That volume was driven by trading in Microsoft, which soared $9.75 to a record $108.44 as more than 77 million shares changed hands.
Microsoft--already up 42% for the year through Tuesday despite the government’s antitrust case against the company--set off a new feeding frenzy for its shares with the announcement that it had shipped its Windows 2000 operating system to manufacturers.
That also lifted Intel, which rocketed $6.50 to $78.94, because Intel chips, of course, run most computers that use Windows.
Speculation that Microsoft and the government might settle their fight also has helped boost interest in the stock in recent days.
Money also poured into other tech leaders on Wednesday, including Oracle, up $13.44 to $90.38 after its bullish earnings report; and Dell, up $2.13 to $43.19.
Because these stocks are major components of the Nasdaq index, their trend largely determines the index’s trend.
Their gains offset continued weakness in some Internet shares, including Yahoo, down $5.63 to $327.50, and EBay, down $4.75 to $145.81. The Interactive Week Internet-stock index fell 1.1% after sliding 3.6% on Tuesday.
“There are relative values within the technology arena,” including some of the biggest names, said David G. Sowerby, a vice president at Loomis, Sayles & Co. “Compared to some of the Internet stocks, these shares look like a bargain.”
But another tech leader, Cisco Systems, slid $2.06 to $95.88 after warning that sales growth may slow in the future. Some analysts called it a routine warning.
Rising bond yields on Wednesday didn’t stall many tech giants, but may have weighed on the broader market, traders said.
The 30-year Treasury bond yield inched up from 6.30% on Tuesday to 6.32%, highest since Oct. 27. The economy’s strength has many bond investors convinced the Federal Reserve will start a new round of interest-rate increases in 2000.
Among Wednesday’s highlights:
* Other tech winners included Motorola, up $10.81 to $130.19; BMC Software, up $4.06 to $70.44; and General Instrument, up $5.63 to $73.56.
But Verity plunged $22.88 to $26.13 after the software firm reported second-quarter revenue of $16.7 million, lower than the company expected because it didn’t complete several sales.
* Although the focus was on tech, some industrial sectors also moved up sharply. Paper stocks led the way, on news of tighter paper inventories. International Paper gained $1.51 to $55.82.
Among other industrials, Dow Chemical jumped $4.63 to $127.94, and Alcoa gained $4.31 to $79.
* Financial stocks were weak amid rising bond yields. Wells Fargo fell $1.69 to $41.81; Fannie Mae lost $1.19 to $63.06.
* Among new stock issues, ECollege.com (ticker symbol: ECLG) rose $3.25 to $14.25, Z Tel Technologies (ZTEL) zoomed $16.25 to $33.25 and Caliper Technologies (CALP) soared $23.25 to $39.25.
Market Roundup, C11
