Nasdaq Hits Record Despite Some Tech Profit-Taking
Major technology stocks closed mixed Wednesday, but enough advanced to push Nasdaq to yet another new high, while the broad market ended lower.
The Nasdaq composite gained 26.15 points, or 0.7%, to 3,937.30, after rising as high as 3,948.48.
The Dow industrials, however, edged up just 3.06 points to 11,203.60. The Standard & Poor’s 500 also managed only a tiny gain, up 0.2% to 1,436.13, but that was a record close nonetheless.
In the broader market losers topped winners by 17 to 14 on the New York Stock Exchange and by 22 to 19 on Nasdaq.
“It’s another day at the office. The pattern remains the same and that pattern is continued strength by individual issues that dominate the averages,” said Donald Selkin, strategist at Joseph Gunnar & Co.
“In the broader market, the [tally of] new highs versus new lows is a disaster. But the stock market is not a democracy.”
Some tech-stock stars were hit by profit-taking. Losers included Apple, down $2.56 to $99.94; IBM, down $2.13 to $108; Gateway, down $2.06 to $69.94; and 3Com, down $4.69 to $48.44 after its earnings-shortfall warning on Tuesday.
But 3Com’s pattern suggests many investors see only opportunity in any tech-stock decline: The computer networker’s shares traded as low as $43.63, but closed well above that.
The software sector helped pull Nasdaq higher. Microsoft rose $1.69 to a record $117.56, though it fell in after-hours trading on news of its chief financial officer’s decision to leave the company.
Other software winners included Computer Associates, up $2.81 to $67; Adobe Systems, up $3.50 to $66.88; and Oracle, up $7.38 to a record $105.06.
There was little action in the bond market to interfere with stocks. Yields closed largely unchanged, hovering near two-year highs. The Treasury sold new two-year notes at a yield of 6.23%.
“The bottom line is that the economy is on a tear,” and that keeps fears alive about inflation and Fed increases, depressing bonds, said Garth Nisbet, chief investment officer at Crabbe Huson Group in Portland, Ore.
But for the stock market, the strong economy also means strong corporate profits--a big reason why stocks keep advancing worldwide.
The Japanese market rose 2.1% on Wednesday, while German shares jumped 1.2% and the Brazilian market gained 2.1%.
Among Wednesday’s highlights:
* Strong telecom stocks included Equant, up $5.56 to $106.19; Echostar Communications, up $5.25 to $93; and Deutsche Telekom, up $5.06 to $66.75.
* Biotech shares continued their weeklong rise, as Genome Therapeutics vaulted $4.50 to $13.50 after the company said it will collaborate with American Home Products on gene-based research to prevent or treat osteoporosis.
* Eastman Kodak jumped $4.69 to $62.06 after the struggling photography giant named Robert Brust from Unisys chief financial officer. Even with the gain, Kodak’s stock is down 14% this year.
* Canadian software firm Corel, which recently was rumored to be a takeover candidate, plunged $5.38 to $13.19 after saying it expects a loss for the quarter ended Nov. 30 of 14 cents a share.
* Transocean Offshore rose $2.56 to $29.69, NCR climbed $4.44 to $37 and First Security advanced $1.31 to $29.75 after S&P; said it will add them to the S&P; 500.
Also, 99 Cents Only Stores jumped $4.53 to $35.03 as it was added to the S&P; 600 small-stock index.
Stocks that could move today include Gemstar International, which Nasdaq said late Wednesday will replace Qwest Communications in the Nasdaq 100 index effective Jan. 3. Gemstar rose 19 cents to $65.63 in regular trading but rose to $75.50 in after-hours trading.
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Market Roundup, C8
