Techs Rally but Dow Falls; Bond Yields Ease
Stocks were mixed for a second straight session Thursday, as a sharp rally in major technology stocks was offset by selling in other sectors.
In the bond market, mortgage giant Freddie Mac and Ford Motor sold a total of $9.8 billion of new securities, reducing some of the pending glut in the market. That helped Treasury yields pull back a bit.
On Wall Street, the Dow Jones industrials slid 60.47 points, or 0.5%, to 11,126.89, despite a surge in Hewlett-Packard, one of the Dow 30 stocks.
The broad market also was lower, as losers topped winners by 17 to 13 on the New York Stock Exchange in active trading.
But the tech-heavy Nasdaq composite index surged 28.82 points, or 1.1%, to a record 2,771.86.
Optimism about robust second-quarter earnings at major tech firms helped power those shares higher, led by such names as Applied Materials, up $2.44 to $72.94; IBM, up $1.19 to $134; Micron Technology, up $4.06 to $48.31; and Apple, up $4.63 to $54.50.
In the Internet sector, Yahoo eased $2.63 to $164.44 after trading as high as $175.25 in the wake of its better-than-expected earnings report late Wednesday. Many other Net-related shares gained, however.
Analysts said investors remain optimistic about second-quarter earnings overall but nervous about the strong U.S. economy’s potential to push interest rates higher.
Rate worries receded somewhat Thursday as bond yields pulled back. Ford found so many buyers for its bond offering that the size of the deal was raised to the maximum expected, a total of $7.5 billion in securities. It’s the second-biggest corporate bond offering in history, after AT&T;’s $8-billion offering in March.
Freddie Mac also raised a load of cash by selling $3 billion of five-year notes.
The Treasury bond market, which has been under pressure in part because some investors have been selling Treasuries to buy corporate bonds, rallied in apparent relief over the corporate sales. The 30-year T-bond yield dipped to 5.99% from 6.05% on Wednesday.
In currency trading, the beleaguered euro fell to a new low of $1.015 as currency traders remain downbeat about Europe’s economic growth prospects.
Among Thursday’s market highlights:
* While personal computer shares led the tech rally, semiconductor shares were also strong, reflecting a recent resurgence in global demand. Motorola jumped $3.19 to $97.94, Texas Instruments leaped $2.13 to $147.50 and Intel gained $1.38 to $65.75.
* In the Internet sector, winners included America Online, up $2.69 to $127.69; CDNow, up $2.06 to $19.81; Broadcom, up $2.94 to $138.81; and Internet service provider Mindspring Enterprises, up $8.06 to $53.31 after saying it remains in discussions about a possible “business combination.”
But EBay sank $4.06 to $134.19 and Healtheon was off $5 to $72.06.
* Online brokerage National Discount Brokers surged $5.25 to $59. After trading closed, it reported quarterly operating earnings of 47 cents a share, up from 14 cents a year ago but slightly below analysts’ estimates.
* The Dow was weighed down by GM, off $2.25 to $67.75; J.P. Morgan, down $4.81 to $141.19; and Johnson & Johnson, off $2.19 to $95.69.
Also, General Electric slipped 94 cents to $117 despite a strong earnings report.
* Retail stocks were mixed despite many robust June sales reports. Wal-Mart lost $1 to $47, J.C. Penney fell $1.50 to $47.25 and Ann Taylor sank $2.25 to $41.63.
In foreign trading, Argentina’s market plunged 4.4% amid growing labor strife ahead of October’s presidential elections.
Mexico’s market also gave ground, losing 0.7%. Brazilian stocks fell 2%.
Market Roundup, C6
