Nasdaq Inches Up; Treasury Yields Drop
The Nasdaq composite index ended a seven-session losing streak Thursday, though it closed only barely higher after surrendering a strong early rebound.
Blue-chip stocks fared better, as investors rummaged through the beaten-down market for potential bargains.
Meanwhile, investors poured into shorter-term Treasury securities, apparently betting on significant interest rate cuts by the Federal Reserve early in 2001.
On Wall Street the tech-dominated Nasdaq composite inched up 7.34 points, or 0.3%, to close at 2,340.12 after falling 22.6% in the previous seven sessions.
Nasdaq had been up as much as 90 points at midday before selling accelerated again.
The Dow industrials gained 168.36 points, or 1.6%, to 10,487.29, while the Standard & Poor’s 500 added 0.8%.
Trading was heavy on both Nasdaq and the New York Stock Exchange. Losers still outnumbered winners by 22 to 18 on Nasdaq, but winners had a 17-to-12 edge on the NYSE.
Many Wall Street pros have been arguing for days, if not weeks, that the Nasdaq market in particular was oversold and ready for a sustained rebound. But that rebound hasn’t materialized. Indeed, selling worsened Wednesday, when Nasdaq plunged 7.1%, bringing its loss from its spring peak to nearly 54%.
Still, many analysts note that stocks don’t go straight down forever, even in bad bear markets.
Some argue that this week’s slide in tech stocks has stemmed from a final barrage of tax-related year-end selling, which now could be winding down.
“This is a bargain hunter’s market,” said Arthur Hogan, chief market analyst for Jefferies & Co.
But others say investors’ deepest concerns--mainly over the economy’s slowdown, and whether it will turn into a genuine recession--are unlikely to go away soon.
There was more bad news Thursday from some of the tech sector’s most troubled companies, including Lucent Technologies, which fell $1.31 to $14.19, and Xerox, which slid $1.19 to $4.81.
But telecom services provider Qwest Communications gained $5.13 to $37.50 after it reiterated previous sales and earnings forecasts--bucking the trend of earnings warnings from many telecom firms.
Other tech stocks rising included Cisco Systems, up $2.38 to $38.88; Intel, up $1.19 to $33.13; and EMC, up $3.63 to $59.25. But PMC-Sierra slid $14.38 to $69.50 and Yahoo fell $2.31 to $25.63.
Blue chips attracting buyers included Coca-Cola, up $3.13 to $59.38 and Wal-Mart, up $2.81 to $51.75.
In the bond market, yields tumbled on shorter-term Treasuries as money flowed in from investors seeking to lock in yields.
The three-month T-bill yield slid to 5.47% from 5.75% Wednesday. The one-year T-bill yield fell to 5.34% from 5.49%.
Bond traders said the continuing plunge in yields shows the market assumes the Fed will cut its key short-term rate in January.
Financial stocks rallied as rates fell. Bank of America jumped $3.06 to $45.81 and Downey Savings surged $2.06 to $60.88.
In currency markets the dollar was a victim of the rising concern about the economy’s health. Traders sold dollars and bought euros, driving the euro to 91.4 U.S. cents from 90.8 cents on Wednesday. It’s now the highest since August.
In energy markets crude oil futures rose 21 cents to $25.98 a barrel. OPEC President Ali Rodriguez said the cartel could cut its output within weeks, rejecting calls by U.S. President-elect George W. Bush for oil producers to boost output.
Rodriguez said the recent slide in oil prices was the result of an over- supply in the market, exacerbated by the group’s decision to increase supplies by about 4 million barrels a day this year.
Natural gas futures, meanwhile, again hit record highs, up 50.4 cents to $9.83 per million British thermal units in New York, on concern that cold weather is draining U.S. inventories too quickly.
Market Roundup: C8, C9
