Major Indexes Ignore Surge in Bond Yields
Key stock indexes rose Thursday as investors shook off a slump in the bond market and as fresh optimism about Internet shares drove the technology sector higher.
The Nasdaq composite index rocketed 93.11 points, or 2.6%, to a record 3,715.06. The Dow industrials, which had fallen as low as 11,124 early on, resurged to close up 19.57 points at 11,244.89, the day’s high.
Losers had a small edge on the New York Stock Exchange, but on Nasdaq slightly more stocks rose than fell.
The Russell 2,000 small-stock index gained 0.9%.
It could have been a lot worse, given what happened with bonds: Treasury yields rose for the fourth straight day, hitting new two-year highs, as rising European bond yields and ongoing fears about the Federal Reserve’s intentions soured bond traders.
The yield on the benchmark 30-year Treasury bond vaulted to 6.39% from 6.32% on Wednesday. That is the highest since late-summer 1997.
Bonds’ woes put more downward pressure on financial stocks. “The bond market is a major hurdle, pushing down all the rate-sensitive stocks in the Dow,” said Larry Wachtel, analyst at Prudential Securities.
American Express lost $5.56 to $152.63, Fannie Mae slumped $2.38 to $60.69 and Wells Fargo skidded $2.38 to $39.44.
But the red-hot tech sector seemed oblivious. Web-related stocks rose sharply, a day after Internet venture fund CMGI announced a 2-for-1 stock split and reported a much smaller-than-expected quarterly loss. CMGI jumped $21.81 to $221.56.
Microsoft extended Wednesday’s gains, rising $5.25 to a record $113.69 a day after saying it completed work on Windows 2000 and began shipping it to manufacturers.
Elsewhere in the tech sector, Yahoo climbed $13.50 to $341, Dell Computer added $1.75 to $44.94, Micron Technology leaped $7 to $73 and Lycos rose $4.56 to $82.06.
Telecom leaders included Qualcomm, the S&P; 500’s biggest gainer this year, up $16.06 to $439.25; MCI WorldCom, up $2.44 to $77.50; and JDS Uniphase, up $21.25 to $249.88.
Other trading highlights:
* Texas Instruments rose $4.44 to $100.06 and Cisco Systems gained $2 to $97.88 on news that the two companies agreed to develop high-speed modems for transmitting data and voice over cable systems.
* Vitria Technology, which makes software for electronic commerce, climbed $20.38 to $182.50 after announcing a 2-for-1 stock split Jan. 17 for holders of record Dec. 28.
* Cendant surged $6.56 to $23 as Liberty Media said it will buy $400 million of Cendant stock.
* Among new issues that began trading Thursday, biotech firm Maxygen (ticker symbol: MAXY) zoomed $26.06 to $42.06 and Xpedior (XPDR) gained $7 to $26.
Also, data communications service firm Infonet Services (IN) of El Segundo rallied $5.44 to $26.44 after trading as high as $30 at the opening on the NYSE.
* Many drug and consumer stocks lost ground as investors maintained their tech tunnel-vision. Coca-Cola slid $1.38 to $58.50, Procter & Gamble slipped $2.75 to $109.88, Merck sagged $2.25 to $69.44 and Bristol-Myers Squibb dropped $2.94 to $64.56.
But Nike rebounded $3.81 to $45.69 after posting quarterly earnings of 38 cents a share, beating the estimates by 4 cents.
* Outside of tech, some investors continued snap up certain heavy-industry shares for a second day. Winners included Dover, up $1.56 to $46.81; Emerson Electric, up $1.31 to $59.31; and B.F. Goodrich, up $1.31 to $23.69. But International Paper gave back $3.33 to $52.50.
* Southland stocks showing strength included Conexant Systems, up $6.19 to $69.38; Vitesse Semiconductor, up $4.38 to $49.88; Broadcom, up $7.75 to $222; and MiniMed, up $5.13 to $70.13.
But the drug slump dragged down IDEC Pharmaceuticals, off $4 at $118.50.
Market Roundup, C8
