Dow, Nasdaq Gain as Rate Worries Ebb
Stocks rose Wednesday as investors surveyed a new economic outlook that apparently includes stable interest rates.
A late buying spree pushed the Dow Jones industrial average into positive territory. The blue-chip index rose 5.50 points, or 0.1%, to 11,144.65, after falling more than 50 points early in the session.
Broader stock indicators also climbed. The Standard & Poor’s 500 index rose 7.84 points, or 0.5%, to 1,505.97, while the Nasdaq composite rose 52.80 points, or 1.3%, to 4,011.01. It was the first time since July 25 that the technology-dominated index closed above 4,000.
“Investors can focus on the economy and they’re going to like what they see. It looks like the Fed will be out of our face for the foreseeable future,” said Alfred Goldman, director of market analysis at A.G. Edwards & Sons in St. Louis.
Wednesday’s market was sector-driven, meaning no broad themes sent stock prices in one direction or another.
Oil stocks rallied as crude prices rose and U.S. inventories fell to their lowest level in nearly 25 years. Exxon Mobil rose $1.38 to $84.50, Chevron jumped $2.25 to $88.88 and Texaco gained $1.81 to $54.
Other energy stocks also rose. Anadarko Petroleum added $2.56 to $63 and Apache gained $2.63 to $62.84.
Smith International, named a top stock pick by Merrill Lynch, climbed $3.38 to $82.50.
Investors sold grocery stocks after Albertson’s warned that its second-quarter profit will fall short of expectations on slow sales and higher operating costs.
Albertson’s dropped $3.69 to $22.75 and Kroger eased 81 cents to $22.19.
Widely held technology stocks fed Nasdaq’s rise. Intel gained $2.50 to a record $74.63 and Cisco Systems rose $2.38 to $67.19.
Declining issues outnumbered advancers by a 5-4 ratio on the New York Stock Exchange, where volume was moderate, and by a slimmer margin on Nasdaq.
U.S. Treasury yields fell for the first time in three days, pushing the yield on the most-active 10-year note to a one-year low on speculation that the Fed may refrain from raising interest rates much more this year.
The 10-year yield eased to 5.73% from 5.77% and the 30-year yield dropped to 5.67% from 5.71%.
Among the other equity highlights:
* Semiconductor-equipment stocks rallied Wednesday after the July book-to-bill report showed demand remained strong, even in the typically slow summer months.
KLA Tencor rose $4.69 to $60.31, Applied Materials gained $3.44 to $85.44, Lam Research rallied $2.50 to $30.25 and Novellus Systems climbed $2.94 to $60.
* Plug Power slid $3.13 to $43.13 after the fuel-cell developer said Chief Executive Gary Mittleman quit. His resignation comes less than a month after the company said it would produce only one-fourth as many fuel cells as it expected to in 2000 and delay commercial introduction of its product by a year.
The stock had surged to more than $150 a share in January on fuel-cell fever.
* Airline stocks retreated as investors bet that higher fuel costs will hurt their results.
Delta Air Lines dropped $2.56 to $48, American parent AMR fell $1.81 to $32 and US Airways Group declined $1.25 to $33.
* Southern California stocks on the move included Stamps.com, up $1.19 to $4.75 as the Santa Monica company said its Internet postage service will be included in the 2001 versions of Intuit’s Quicken software products.
Wireless Facilities rose $9.56 to $74.19 as the San Diego company, which helps build and manage wireless networks, was added to a list of stocks recommended by tech analyst George Gilder.
Market Roundup, C9-10
