Nasdaq Inches to New High; Dow Drops 81 on Profit-Taking
Stocks closed mixed Monday as gains in some tech shares lifted Nasdaq to a record high, while blue chips were hit by profit-taking.
Meanwhile, gold prices tumbled again.
On Wall Street the Nasdaq composite eked out a 1.22-point gain to 2,967.65, enough for a record finish.
But the Dow Jones industrials slid 81.35 points, or 0.8%, to 10,648.51 after soaring more than 400 points in the last three sessions of last week.
Despite the Dow’s slide, winners and losers were nearly evenly matched on the New York Stock Exchange. Trading remained active.
Stocks had to put up a fight as bond yields inched up after last week’s dive.
With a heavy calendar of economic reports this week, bond buyers pulled back. That allowed the 30-year Treasury bond yield to edge up to 6.18% from 6.16% on Friday.
Investors still are wrestling with the prospect of another rise in short-term interest rates when the Federal Reserve meets on Nov. 16. The question now is whether another Fed hike might already be built into many investors’ assumptions--along with the assumption that if the Fed acts, the central bank also will give some sign that it may be finished tightening credit for the time being.
One traditional indicator of the inflationary pressures the Fed fears is flashing an anti-inflation sign once again: Near-term gold futures plummeted nearly 3% in New York, losing $8.80 to $290.40 an ounce.
The price had rocketed in October after European central banks pledged to limit future gold sales. But the price spike, to $324.50, also was fueled in part by traders’ assumptions that some gold miners that had made bad hedging bets--expecting lower prices--would be forced to buy the metal in mass quantities to make good on their bets.
But Ashanti Goldfields, Africa’s No. 3 producer, on Monday agreed with creditors to delay collateral payments on 10 million ounces of gold it sold before the metal could be mined. In exchange, creditors will buy a stake in the company at a discount.
That sent other gold mining stocks lower, on dashed hopes for higher bullion prices. Newmont Mining slid $1.31 to $20.63 and Barrick Gold lost 50 cents to $17.81.
Among Monday’s other highlights:
* Software stocks helped lead Nasdaq higher, with Oracle surging $3.63 to $51.19 and Siebel Systems up $7.88 to $117.69.
Also, some Internet shares rallied, including EBay, up $1.88 to $137; Broadcom, up $10.19 to $138; and Spyglass, up $8.44 to $24.50 on a deal with Fujitsu.
* The Dow’s new stocks, added at the start of trading Monday, were mixed: Intel fell $1.44 to $76, Microsoft eased 19 cents to $92.38, SBC Communications added 25 cents to $53 and Home Depot rose 50 cents to $76.25.
The four contributed a net gain of 5.82 points. The stocks that were removed--Sears, Goodyear Tire & Rubber, Chevron and Union Carbide--would have subtracted a net 18.05 points, leaving the old Dow at 10,621.57, according to Bloomberg News.
* Two blue chips weighed on the Dow: GE, down $6.13 to $129.38; and American Express, down $5 to $149. Both hit record highs last week.
* Tyco International fell another $4.56 to $35.56. The company has been dogged by fears that accounting tricks have helped it boost earnings. The firm has denied any accounting improprieties, but investors may have another problem with it now: As the stock falls Tyco’s aggressive acquisition strategy--the key to its growth--may be in jeopardy, as it loses a strong “currency” for deals.
In foreign trading, South Korean stocks rallied strongly, but most gains elsewhere were muted.
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Market Roundup, C11
