Net Stocks, Corporate Earnings Pull Markets Up
Stocks roared back on Thursday as Wall Street shrugged off NATO airstrikes against Yugoslavia and focused instead on corporate earnings--and on some new Internet-stock recommendations.
The Dow Jones industrials leaped 169.55 points, or 1.8%, to 9,836.39, again putting the blue-chip index within striking distance of 10,000.
The Nasdaq composite index rocketed 2.9% to 2,434.80, fueled by gains in technology and Internet shares--in particular, Microsoft, which zoomed $8.69 to a record $179.94.
While NATO bombs dropped on Yugoslavia, “Investors recognize this is a political development and it does not have a bearing on our economy,” said Alan Skrainka, strategist at brokerage Edward Jones.
More attention-getting for investors was brokerage Morgan Stanley Dean Witter’s report that first-quarter operating earnings jumped 50%, to a record $1 billion--reflecting Wall Street’s boom times.
The stock soared $5.50 to $103.88, boosting many other financial stocks.
The report “certainly bodes well for the financial services [firms] and brokerages, because a rising tide brings everyone else with it,” said Jay Suskind, trader at Ryan, Beck & Co.
Optimism about earnings helped bring more buyers into the broad market Thursday, traders said. Winners topped losers by 19 to 11 on the New York Stock Exchange and by 23 to 15 on Nasdaq. Even battered smaller stocks gained, with the Russell 2,000 small-stock index rising 2.2%.
Stocks also ignored a jump in bond yields. The 30-year Treasury bond yield rose from 5.53% on Wednesday to 5.58%, the highest since March 8.
Foreign stock markets had rebounded overnight. Like Wall Street, they appear mostly unworried about the Balkan situation. The German market gained 1.7%, French stocks rose 1.9% and Japanese shares surged 3%.
In Brazil, the main market index leaped 4.9% to an eight-month high of 10,937 after the government cut short-term interest rates from 45% to 42%--the first reduction since mid-December, before the country’s devastating currency devaluation.
On Wall Street, major indexes are again flirting with record highs ahead of Federal Reserve policymakers’ meeting Tuesday. The central bank is expected to leave rates unchanged.
Among Thursday’s highlights:
* Financial stocks leading the market higher included Merrill Lynch, up $2.31 to $87.56; Citigroup, up $2.88 to $63; Chase Manhattan, up $2.13 to $81.50; and Charles Schwab, up $6.13 to $90.50.
* Major tech stocks rebounding included Sun Microsystems, up $5 to $118.31; Adobe Systems, up $2 to $56; and Cisco Systems, up $3 to $107.44.
“The appetite is still for technology,” said Roy Blumberg, investment strategist of Chestnut Investment Group/Allied Securities.
But chip maker Micron Technology sank $4.56 to $47.44 despite reporting better-than-expected earnings. Some analysts say pricing pressures for Micron’s chips remain severe.
* Internet stocks boomed again, after brokerage NationsBanc Montgomery Securities issued buy ratings on nine Net companies. Among the nine: America Online, up $9.38 to $126.50; @Home, up $10.25 to $146.25; Yahoo, up $18.50 to $179 and Infoseek, up $4 to $81.13.
Among new issues, OneMain.com soared $17.56 to $39.56 on its first day of trading. The firm represents 17 Net service providers in four states.
* Some retail stocks sparked back to life, led by Wal-Mart, up $2.88 to $91.88, and Dayton Hudson, up $2.44 to $69.50.
* Maytag soared $5.94 to $60.25 after predicting it will report robust first-quarter earnings--another beneficiary of strong consumer spending.
Market Roundup, C6
