Treasuries Hit by Weak Bids; Blue Chips Lag, Nasdaq Soars
Treasury securities got pummeled Thursday after the $10-billion auction of new 30-year debt received the weakest bids in at least 17 years. On Wall Street, Nasdaq hit another record, but stocks overall were mixed.
Bond dealers demanded higher yields after three weeks of turbulent trading. The market’s volatility the last 10 days has been the greatest since October 1998, when giant hedge fund Long-Term Capital Management neared collapse.
Although a week ago traders were talking about a shortage of long-term T-bonds, on Thursday the bond’s yield soared to 6.43% from 6.30% amid a lack of bids at the auction.
Because of the sudden price swings, “people don’t want to get involved,” Michael Cheah of SunAmerica Asset Management said.
With confusion in the bond market, and more signs that gold mining firms will stop price-hedging practices, gold futures jumped $10.10 to $316.20 in New York.
Not that any of that mattered on the Nasdaq Stock Market: The composite index soared 122.39 points, or 2.8%, to close at 4,485.63, its fourth new high in five sessions.
But other barometers were a grab bag, with the Dow Jones industrials falling 55.53 points, or 0.5%, to 10,643.63. The Standard & Poor’s 500 rose 0.4% while the Russell 2,000 index of smaller stocks gained 1.2% to a record.
Among the day’s highlights:
* Nasdaq leaders included many of the usual suspects: Juniper Networks surged $22.56 to $208.50, Sun Microsystems jumped $3.06 to $94.63 and Cisco Systems shot up $7.13 to $135.94. Cisco’s move made it the second-most valuable U.S. company, with a market capitalization of $465 billion, displacing General Electric, at $444 billion.
* Many chip-related stocks showed strength, with Applied Materials surging $11 to $174.75 and Vitesse Semiconductor vaulting $15.94 to $71.75.
* Many Internet stocks were lower a day after hackers disrupted several popular Web sites. Amazon.com fell $4.06 to $76.19 and EBay eased $1.63 to $162.38.
* Several tech firms surged in their debuts, including Internet consultant Organic (ticker symbol: OGNC), up $19.94 to $39.94; Net software maker Xcare.net (XCAR), up $13.25 to $31.25; and multimedia software maker Witness Systems, up $20.06 to $40.06.
* Among blue chips, 3M fell $1.63 to $86, DuPont dropped $2.63 to $54.06 and Procter & Gamble lost $2.56 to $91.44 as investors generally shunned stocks outside the tech sector.
* Financial issues got clipped as bond yields rose, with J.P. Morgan off $2.56 to $114, American Express off $2.06 to $154.50 and Wells Fargo off $1.13 to $36.75.
* Drug stocks declined, with Merck sliding $2.38 to $69, Schering-Plough losing $2.13 to $43.38, Pfizer falling $1.13 to $35 and Warner-Lambert, which agreed to be bought by Pfizer, dropping $3.50 to $93.63.
* UnumProvident plunged $9.44 to $16.25 as the disability insurer said fourth-quarter earnings dropped more than expected. After issuing a profit warning, contract staffer AHL Services slumped $4.81 to $9.44.
In foreign trading, Asian and European stocks were mixed. Latin American indexes climbed, with Mexico’s and Argentina’s both gaining 3.4%.
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Market Roundup, C6
