Ever-Rising Nasdaq Breaks 3,400 as Broad Market Gains
U.S. stocks rose Wednesday as investors scurried to keep up with the Nasdaq composite index, which is on track for its best year ever.
For investors holding cash, “there’s a need and desire to get back into the market and follow the leaders,” said Phil Orlando, chief investment officer for Value Line Asset Management Inc. “You want to show your year-end portfolio with the names that have been really good performers.”
The Nasdaq jumped 77.63 points, or 2.3%, to a record 3,420.50, giving it a gain of more than 56% in 1999 and closing above 3,400 for the first time. It was the composite’s 15th record close in 19 sessions.
With a further gain of less than 1 percentage point, the index would surpass the 57% rise it posted in 1991, the best year in its 28-year history.
The Standard & Poor’s 500 rose 12.44 points, or 0.9%, to 1,417.08, leaving the blue-chip index 8 points shy of a record. The narrower Dow Jones industrial average climbed 12.54 points, or 0.1%, to 11,008.17. Eight stocks fell for every seven that rose on the New York Stock Exchange.
As usual, tech paved the way. Cisco Systems, now one of three companies to have a market value of more than $300 billion, gained $3.94 to $92.44. Microsoft, with a value of $473 billion, rose $2.06 to $91.69, but General Electric, at $449 billion, eased 75 cents to $136.88.
EBay vaulted $11.94 to $179.50 after Adams Harkness & Hill started coverage of the stock with an “accumulate” rating. Several high-profile Internet stocks such as EBay and Yahoo that were battered this summer have recovered much of their losses.
Other tech winners included Intel, up $3.19 to $82.19, and Yahoo, up $9.81 to $231. “Momentum” investors, who seek to buy rapidly rising stocks, are piling into computer-related shares at the first sign of higher prices, traders said.
But IBM, which slipped $1.56 to $104.50, has momentum the other way: The stock has slid 24% since setting a record July 13 amid concern that the company is taking extraordinary accounting steps to boost profit growth.
Trading on the NYSE was slow before the Thanksgiving holiday. About 743 million shares changed hands on the Big Board, below the daily average of 836 million shares for the last three months. But on Nasdaq, trading was more active, with 1.3 billion shares changing hands.
Crude oil gained almost 2%, resuming a monthlong surge, after an industry report showed that U.S. inventories fell for a second consecutive week. Exxon rose $1.13 to $79.13 and Chevron added 63 cents to $90.25.
The benchmark 30-year U.S Treasury bond yield rose to 6.20%, from 6.19% the day before, after the Commerce Department said third-quarter gross domestic product rose at a rate higher than previously estimated.
Among the highlights:
* Banks and brokers fell after the economic report heightened concern that interest rates might be raised. J.P. Morgan lost $2.31 to $132.88, American Express skidded $2.50 to $153, Merrill Lynch dropped $1.31 to $84.38 and Lehman Bros. Holdings sank $1.06 to $77.31.
* Telecom continued to sizzle, as Nextel Communications zoomed $17.31 to $115.06 after Morgan Stanley Dean Witter raised its price target to $118 a share from $88. Qualcomm climbed $15.06 to $375.31.
AT&T; rose $2.44 to $53.19 after the company decided to issue a tracking stock for its wireless business, according to the Wall Street Journal.
* Intuit jumped $6.31 to $50.38 after reporting a lower-than-expected loss for the latest quarter.
Market Roundup, C7
