Profit-Taking Clips the Dow but Tech Shares Roar Higher
The Dow Jones industrials retreated Monday from last week’s record high as blue-chip investors took profits, but broader market indexes rose--paced by technology shares.
The Dow eased 8.47 points to close at 9,727.61. The index opened higher, then retreated as much as 61 points before regaining some of the loss in the final hour of trading.
“We’re just giving back some of the gains of last Thursday and Friday,” said John Shaughnessy, chief investment strategist at Advest Inc., noting the Dow’s 268-point surge on Friday. “But the backdrop of this market continues to be very, very solid.”
Notably, the Standard & Poor’s 500 index added 7.26 points to reach a record 1,282.73, beating its previous closing high of 1,279.69 set Jan. 29.
The Nasdaq composite surged 60.51 points, or 2.6%, to 2,397.62, still nearly 113 points below its all-time high of 2,510.09 on Feb. 1.
Yet the broader market was lower, with losers outnumbering winners by 16 to 14 on the New York Stock Exchange and by 20 to 18 on Nasdaq.
Trading volume on the NYSE was subdued, continuing the recent trend.
In the bond market, where falling yields on Friday in the wake of a favorable February employment report helped trigger the Dow’s stunning gain, there was little follow-through on Monday.
The yield on the benchmark 30-year Treasury bond slipped to 5.59% from 5.60% on Friday.
The stock market was helped by some takeover news. Belgian-Dutch financial services group Fortis agreed to pay $2.6 billion, or $55 a share, for American Bankers Insurance Group, a Miami-based insurer. ABI’s shares rose $5.63 to $52.
Allied Waste Industries said it will pay $7.3 billion, or $45 a share, for larger rival Browning-Ferris Industries. Browning-Ferris shares climbed $4.13 to $38.88, while Allied Waste’s shares added $1.94 to $16.94.
Tech stocks rallied after a weak performance last week. Computer chip maker Intel reached a preliminary agreement to settle Federal Trade Commission charges that it had illegally threatened to withhold critical information about its Pentium chip unless three other companies handed over secret information about their products.
Intel shares climbed $5 to $119.63, sparking a broad rally in Nasdaq-traded computer stocks. Dell Computer, for example, advanced $2.38 to $45.38 as the volume leader on Nasdaq. Oracle rose 88 cents to $38.31 and Cisco Systems gained $3.75 to $104.56.
Among Monday’s highlights:
* Also in the tech sector, Microsoft rose $4.06 to $159, as the world’s largest software maker is expected to sign agreements for alliances with at least six Chinese electronics firms, according to two people familiar with the plan.
Novell soared $3.19 to $23.31 after a report in Barron’s said shares of the maker of networking software could quadruple to $80 in five years if it can persuade computer hardware and software makers to use its directory-services technology.
* The Internet sector had another big day, with EBay up $21.75 to $171, Yahoo up $10.63 to $170.44, Onsale up $15.38 to $47.25 and Go2Net up $5 to $66.75.
Also, CNet soared $40.13 to $208.13 as the provider of World Wide Web sites and television programming prepares to split its shares 2-for-1 and on optimism about possible acquisitions.
And Broadcom rocketed $12.75 to $66.50 after the leading broadband-communication chip maker said it will supply Northern Telecom with a high-speed communications technology to allow rapid transmission of voice, data and video over telephone lines.
* Oil stocks rose as prices continued to climb on signs that worldwide oil production will decline. Crude oil for April delivery settled at $13.63 a barrel, up 33 cents.
Exxon added $1.25 to $70.94, Anadarko Petroleum rose $1.63 to $33.13 and Schlumberger climbed 75 cents to $55.75.
* On the down side, many financial stocks declined. American Express, which sells mutual funds as well as charge card services, slid $2.06 to $116.56, dragging down the Dow, after rising 10% on Thursday and Friday.
Brokerages, which also surged late last week, slumped as well. Morgan Stanley Dean Witter fell $1.06 to $97.88, Merrill Lynch sank $1.13 to $84.44 and Lehman Bros. fell $1.50 to $57.94.
* Staples rose $2.88 to $31.38 after the second-largest U.S. office supplies retailer said it will become GeoCities’ exclusive office products merchant in a bid to boost sales to small companies.
In foreign trading, Japanese stocks couldn’t sustain Friday’s big advance. The Nikkei-225 index lost 0.8%. But the South Korean market zoomed more than 6%.
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Market Roundup, C12
