Nasdaq Surges Again, Surpasses 3,000

Can Nasdaq make it a hat trick?

The Nasdaq composite index on Monday closed above 3,000 for the first time since Nov. 17, as continued bargain-hunting in the tech arena lifted the index 97.67 points, or 3.4%, to 3,015.10.

If Nasdaq rises today, it will have advanced for three consecutive sessions. That would be the first three-day advance since late August.

The broad market also rallied on Monday, amid rising hopes that the Federal Reserve will cut interest rates in 2001 and amid growing expectations that the presidential race will be decided soon.

The Dow industrials inched up just 12.89 points, or 0.1%, to 10,725.80, but most broader blue-chip indexes were strong. The Standard & Poor’s 500 rose 0.8%.

Winners topped losers by 17 to 12 on the New York Stock Exchange and by 23 to 17 on Nasdaq in active trading.

“For the short term, at least, the worst is over,” said Howard Kornblue, who helps manage the Pilgrim America Magna Cap fund.

Many other analysts also are taking the view that the market’s rebound, which started last week, can be sustained in the near term.

Investment strategist Barton Biggs at Morgan Stanley Dean Witter, a bear most of this year, said Monday that he thinks this rally will continue and could lift Nasdaq to the 3,500 level. That would be a 17% gain from Monday’s close. At least four other Wall Street strategists’ positive comments Monday also helped lift share prices.

Stocks now offer “one of the five most attractive opportunities of the past 20 years,” Edward Kerschner, UBS Warburg’s chief global strategist, said in a report to clients.

After weeks of shunning the tech sector--allowing Nasdaq to fall 50% from its March peak--more traders and investors clearly are in bargain-hunting mode now, analysts say. That may, in the short term, be bad for blue-chip shares that had become favorites as tech crashed.

Monday, for example, Exxon Mobil slumped $2.75 to $85.75. Many food stocks also fell, including General Mills, which lost $1.56 to $39.19 after surging since September.

What’s good for tech stocks also may be bad for Treasury bonds: Yields jumped on Monday as some investors who had rushed into T-bonds in recent weeks took profits.

The yield on the two-year T-note jumped to 5.56% from 5.47% Friday. The yield on the 10-year T-note rose to 5.36% from 5.30%.

A victory by George W. Bush in the presidential race also could hurt T-bonds, some analysts say, if investors assume that Bush’s tax cuts will take away money that the Treasury could have used to buy back debt.

But on Wall Street, many analysts believe that a ruling today by the U.S. Supreme Court in favor of Bush could trigger another broad rally in stocks. Many battered foreign markets could follow U.S. stocks higher, experts say.

Among Monday’s highlights:

* Microsoft paced the tech advance, rising $3.63 to $58.06. Investors expect the No. 1 software maker to benefit from a more lax approach to antitrust regulation under a Bush presidency. “Microsoft is the ultimate Bush stock,” said Mark Donovan, analyst at Boston Partners Asset Management.

* Other tech winners included Intel, up $3.44 to $37.44; Texas Instruments, up $2.38 to $51.88; Applied Materials, up $6.75 to $50.94; and Extreme Networks, up $6.81 to $88.75.

* Bank stocks also advanced on optimism about Fed rate cuts. Citigroup rose $1.38 to $52.88, Bank of America gained $2.56 to $43.44 and Mellon rose $1.31 to $50.75.

Market Roundup: C12-13