Net Stock Rally Lifts Nasdaq to Record
Major stock indexes rose on Thursday amid another Internet-boosting merger deal, but this latest advance won’t win any awards for breadth.
The Nasdaq composite rocketed 70.20 points, or 2.9%, to a record 2,477.34, and the Dow Jones industrials gained a solid 81.10 points, or 0.9%, to 9,281.33.
But rising stocks had only a narrow margin over falling issues on the New York Stock Exchange and on Nasdaq.
In other words, the market’s greatest gains continue to be concentrated in a relative handful of stocks--mainly, tech issues.
‘People are still aggressive buyers of technology stocks,” said Robert Streed, a money manager with Northern Trust Co., which oversees $250 billion. “The growth is clear, and the earnings are coming through.”
“Expensive stocks become more expensive as long as the news stays positive,” he said.
Yahoo, the Internet directory firm, provided the latest Net excitement by announcing its takeover of GeoCities, a Web page provider. The deal sent GeoCities rocketing $42.25 to $117.25 and Yahoo up $31.88 to $367.75.
Still, Yahoo remains below its recent peak of $445.
Among other Net stocks, America Online surged $8.94 to a record $174.44 in leading volume on the Big Board. The Internet service provider late Wednesday announced higher-than-expected fourth quarter earnings and a 2-for-1 stock split.
In other merger news, Ford Motor said it will buy the automotive operations of Sweden’s Volvo for $6.45 billion. Ford rose $2.19 to $62.50, while Volvo’s American depositary receipts declined 81 cents to $26.56.
In currency trading the dollar continued to flex its muscles, rising to 116.40 Japanese yen from 115.82 on Wednesday. The dollar also hit a new high against the euro.
In foreign trading Brazil’s currency, the real, ended at yet another new low of 1.95 to the dollar. The government reported Thursday that Brazil’s unemployment rate soared last year, making prospects for job seekers even gloomier as the nation confronts its current economic crisis.
Yet the Brazilian stock market rose 3.9%, and the Mexican market jumped 4.7%.
Among Wall Street’s highlights:
* In the tech sector, big-name issues resurged, led by Intel, up $4.44 to $137.19; Microsoft, up $5.38 to $174; and Sun Microsystems, up $3.88 to $109.31.
* Net stocks rising sharply included EarthWeb, up $7.44 to $45.94; Infoseek, up $12.50 to $83.94; Xoom.com, up $21.50 to $61.06; and EarthLink, up $4.56 to $79.31.
But Amazon.com eased $2.75 to $122.88 and Broadcom fell $4 to $141.
* The market was helped by a recovery in banking stocks. Citigroup rose $1.69 to $55.50, BankAmerica jumped $2.75 to $64.88 and J.P. Morgan added $4.31 to $104.38.
* Drug stocks also boosted the market. Eli Lilly shares rose $1.50 to $92.25 after it announced strong earnings and authorized a $1-billion stock-repurchase program. Competitor Pfizer, capitalizing on the current craze for stock splits, advanced $5.63 to $127.56 after the company said its board will vote on a 3-for-1 split in April.
* Brokerages, both online and traditional, rallied. E-Trade surged $15.94 to $99.50 and AmeriTrade rose $5.75 to $66.75. Daily online trading volume in the fourth quarter rose 34% from the previous three months, according to a Credit Suisse First Boston report. One in seven U.S. stock trades were done online.
Market Roundup, C6
