MARKET SAVVY : Blue Chips Break Out of a Slump : Markets: The Dow leads a broad rise, tacking on 108 points. Dollar continues its retreat against the yen.
Blue-chip shares rebounded Wednesday after four straight losing sessions, and the broad market also closed higher.
The dollar continued to slump against the Japanese yen.
The Dow Jones industrials gained 108.60 points, or 1%, to 10,937.88. The index had fallen 497 points in recent sessions from its record high of 11,326.04 reached on Aug. 25.
The Nasdaq composite edged up 0.4% on Wednesday, and smaller stocks had a particularly good day: The Standard & Poor’s index of 600 smaller shares jumped 1.3%.
Trading volume remained modest, with 708 million shares changing hands on the New York Stock Exchange floor. Composite NYSE volume, including regional markets, was 844.23 million shares.
Stocks slid late last week, partly reflecting concerns that comments by Federal Reserve Chairman Alan Greenspan were intended to signal his fears about high stock valuations.
Stocks also have been undermined by a rebound in bond yields from three-month lows reached early last week. Yields continued to edge higher on Wednesday, with the 30-year Treasury bond ending at 6.08%, up from 6.06% on Tuesday and the highest since Aug. 16.
With the economy continuing to advance, many analysts question whether bond yields can pull back any time soon.
And on Wall Street, some investors are wary heading into this month, historically the market’s worst month of the year.
“The market has likely set the table for a rocky month,” said Brian Belski, chief investment strategist at George K. Baum & Co.
The dollar, meanwhile, lost more ground against the yen, briefly dropping below 109 yen for only the second time in three years, on expectations that a rosier economic outlook in Japan will lure funds away from U.S. stocks and bonds.
“Slowly but surely, we’re grinding south” on the dollar, said Per Norr, a trader at Den Norske Bank. “It’s just momentum.”
The dollar fell as low as 108.68 yen, not far above its low this year of 108.22 reached in January. It ended in New York at 109.05 yen versus 109.59 on Tuesday.
In Tokyo, the Nikkei stock index surged 2.1% to 17,802 as some traders bet that the Japanese government will step in soon to try to stem the yen’s strength, which is bad for Japanese exporters.
Among Wednesday’s highlights:
* Intel helped prop up the tech sector, rising $1.25 to $83.44 after hitting an all-time high of $85.13 on optimism about its new Merced computer chip.
Also gaining among big tech shares were Apple Computer, up $3.38 to $68.63, and IBM, up $2.69 to $127.25.
But the Internet sector was mostly lower. Yahoo slid $4.19 to $143.31 and Amazon.com fell $5.31 to $119.06.
* Some highflying computer networking stocks were hit by profit-taking. Juniper Networks plummeted $24.75 to $180.25 after the company proposed issuing 1.5 million new shares. It also said certain stockholders planned to sell 3.5 million shares.
Also slumping was Redback Networks, down $7.38 to $99.88.
* Bargain hunters were active in paper and lumber stocks, which have tumbled recently. International Paper, a Dow stock, leaped $1.56 to $48.63 after PaineWebber raised its rating on the shares to “attractive.”
Other winners included Weyerhaeuser, up $1.19 to $57.44; Bowater, up $1.81 to $55.44; and Georgia-Pacific, up 94 cents to $42.31.
* Other industrial stocks rising included AlliedSignal, up $1.56 to $63; DuPont, up $1.88 to $65.25; and Phelps Dodge, up $1.81 to $57.75.
* Drug stocks resumed their rise, led by Warner-Lambert, up $2.25 to $68.63; Merck, up $2 to $68.88; and Amgen, up $1.31 to $84.50.
* Morgan Stanley Dean Witter surged $3.69 to $89.50 on news reports that said it had talked to Chase Manhattan about a merger, but then rejected the idea. Chase fell 97 cents to $82.72.
Market Roundup, C9
