Blue Chips Rise to Lift Dow, Broad Market
The return to blue chips continued Monday, driving the Dow Jones industrials sharply higher and lifting the broad market as well.
Trading volume remained extremely low, however--a sign Wall Street is deep into its August dog days.
Still, there was enough action to lift the Dow 148.34 points, or 1.4%, to 11,176.14, its highest close since April 11.
The Nasdaq composite also rallied briskly, sparking to life late in the day. It posted a gain of 60.22 points, or 1.6%, to 3,849.69.
Among broader indexes, the Standard & Poor’s 500 gained 1.3% and the Russell 2,000 index of smaller stocks rose 0.8%.
The S&P; mid-cap stock index added 1.2% to a record high. The New York Stock Exchange composite also closed at a record.
On the NYSE, winners topped losers, by 9 to 5, continuing a broadening of the market’s latest rally. Winners also topped losers on Nasdaq, by 21 to 19.
Analysts said investors increasingly are willing to bet that the Federal Reserve is finished tightening credit, amid more signs in recent weeks that the economy has slowed.
“People are getting more comfortable with the idea the Fed isn’t going to raise rates,” said A.C. Moore, who oversees about $500 million at Dunvegan Associates in Santa Barbara. “The Fed doesn’t want to kill the economy; it just wants to slow it down.”
Fed policymakers meet next Tuesday.
A late rally in the bond market on Monday helped pull Treasury yields slightly lower, providing support for stocks. The 10-year T-note yield ended at 5.78%.
Wall Street seemed to ignore another rise in crude oil prices. Near-term oil futures in New York ended at $31.94 a barrel, up 92 cents and the highest since July 18.
Meanwhile, heating oil futures rose to a six-month high on expectations that U.S. refiners won’t be able to replenish inventories fast enough to meet heating demand this winter.
Among Monday’s highlights:
* Blue chips leading the Dow higher included Home Depot, up $3.06 to $59; J.P. Morgan, up $4.06 to $147.94; Citigroup, up $1.56 to $74; and Eastman Kodak, up $1.44 to $63.13.
The Dow’s tech blue-chips also gained. IBM surged $2.63 to $124.25 and Hewlett-Packard, which will report quarterly earnings Wednesday, rose $4.50 to $114.50.
* Computer chip stocks were strong. Micron Technology climbed $4.88 to $80.50 after Salomon Smith Barney analyst Jonathan Joseph raised his profit forecasts for the company’s fiscal fourth quarter, ending this month, and the 2001 fiscal year. Joseph cited higher shipment volume and rising chip prices.
Other winners included National Semiconductor, up $1.88 to $38, and Texas Instruments, up $6.25 to $63.50.
* Chris-Craft Industries surged $17 to $79 after the TV-station-owner agreed to a buyout by News Corp. for close to $85 a share. News Corp. rose 38 cents to $50.13.
* Whirlpool rose $2.38 to $45.56. Shares of the No. 1 U.S. maker of large appliances could double in the next two years, Barron’s magazine said, citing Cliff Hoover, a principal at NFJ Investment Group in Dallas. But rival Maytag fell $1.75 to $38.13.
* Energy stocks rose with crude prices. Exxon Mobil gained $1.19 to $82.56 and Apache surged $2.50 to $59.50.
* Utility stocks also continued their recent hot streak. The Dow utility index gained 1.2% to a record. Also hitting a new high was the Morgan Stanley index of major HMO stocks.
Several beverage stocks hit new 52-week highs, including Anheuser-Busch, up $1.50 to $87.50, and PepsiCo, up $1.19 to $47.
* Financial stocks in general were higher amid optimism over interest rates. Merrill Lynch surged $3.38 to a record $142.69.
Market Roundup: C12-13
