FINANCIAL MARKETS : ‘Technology Is Back’ as Nasdaq Rises to Record
The Nasdaq composite index soared to a record Friday as investors snapped up shares of Internet companies and software makers. The swing toward technology stocks came at the expense of industrial shares, which finished mostly lower.
The Nasdaq climbed 35.04 points to close at 2,887.06, easily surpassing its previous closing high of 2,864.48, set July 16. After gaining 1.5% for the week, the composite is up 31.7% for the year.
The Dow Jones industrial average fell 50.97 points to close at 11,028.43 after giving up a gain of 62 points. For the holiday-shortened week, the index lost 0.5%, but it is still up 20.1% this year.
The broader Standard & Poor’s 500 rose 4 points to 1,351.66. For the week, it dipped 0.4%.
Bond prices, meanwhile, rose Friday as a government economic report pointed to tame inflation and the dollar climbed against the yen, boosting the allure of Treasuries. The benchmark 30-year yield sagged to 6.03% from 6.09% the day before.
The dollar rocketed to 108.81 Japanese yen, from 107.78 on Thursday. The euro fell to $1.036--a seven-week low for the European currency--from $1.054.
The Nasdaq’s surge was powered by online auction house EBay, up $13.56 to $158, and Internet search provider Yahoo, up $7.81 to $170.50. Software companies also rallied, with Microsoft gaining 94 cents to $95 and Oracle surging $2.31 to $46.38.
“Technology is back,” said Arthur Hogan, chief market analyst at Jefferies & Co. “This is a group that had been battered in recent weeks, and it’s nice to see money coming back into the group.”
Traders suggested Thursday’s unofficial test run for year 2000 glitches may have alleviated concerns about computer-related companies. Some programmers had feared that the string of nines in the date--9/9/99--might cause computer programs to fail.
But with no major problems reported, programmers and Wall Street professionals gained added confidence that Jan. 1, 2000, will pass without difficulty.
Stocks also benefited from the government report of a drop in wholesale prices, which eased investor concerns about higher interest rates.
While the majority of stocks rose, the big industrial companies that dominate the Dow declined. Caterpillar tumbled $2 to $56.75, and Chevron, which rose throughout the week as crude oil prices rallied, slipped $1.69 to $95.88 as investors took profits.
But the Russell 2,000 index of smaller companies rose 3.42 points to 441.19.
Advancing issues outnumbered decliners by a 6-5 ratio on the New York Stock Exchange, where volume rose from the previous session.
In commodity trading, crude oil futures rose on the New York Mercantile Exchange for the fourth straight session, with the October contract hitting a 31-month high at $23.60 before settling at $23.55.
Among the other highlights:
* Maytag plunged $14.81 to $41.75 after the appliance maker said its third-quarter earnings will miss Wall Street analysts’ estimates because of weak sales of its lower-priced goods.
* Along with the big tech names, several smaller Internet services firms rallied. AdForce leaped $4.19 to $18.88 as the company, which places advertising online, was raised to “strong buy” at Volpe, Brown Whelan; AppNet Systems vaulted $17.50 to $33 as the Web-consulting company was upgraded to “strong buy” at CS First Boston.
* California Amplifier lost $3.75 to $15.31 as the Camarillo-based maker of electronic goods said wireless product shipments continue to be weak.
* Tandy jumped $5.19 to $51.13 as the operator of RadioShack was upgraded to “strong buy” by Prudential Securities.
* Apex plunged $11.06 to $23.75 after the maker of switching systems declined to attend two investor conferences, analysts said.
* Tag Heuer International’s American shares rose $1.44 to $13.44 amid merger rumors involving Swatch Group and others.
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Market Roundup, C4
