Blue Chips Rebound as Techs Suffer; Dow Up Nearly 200
Suddenly, investors are willing to put their money into something other than technology stocks.
The Dow industrials rebounded sharply for a second straight session Tuesday, soaring 198.25 points, or 1.9%, to 10,718.09, as bargain hunters snapped up oil stocks and other beaten-down issues.
Meanwhile, the formerly highflying Nasdaq composite index plunged as much as 127 points early Tuesday as profit-takers swarmed. But the index climbed back to close with a gain of 2.22 points to 4,420.77.
Broader market indicators were modestly higher, but the gains came on weak breadth, with the number of declining issues and advancing issues roughly even on the New York Stock Exchange.
Analysts said the Dow was poised for a comeback after its 538-point drop last week, which knocked the index 11% below its January peak. The Dow gained nearly 1% on Monday.
“A lot of really good names had been beaten down badly,” said Joseph T. Keating, chief investment officer of the Kent Funds in Grand Rapids, Mich. “It was time for some of those stocks to start attracting cash again.”
Blue chips resurging included 3M, up $6.25 to $89.13; American Express, up $5.13 to $159.13; Honeywell, up $3.69 to $46.31; DuPont, up $3 to $54.75; and Procter & Gamble, up $3.88 to $95.75.
The Dow also was helped by Exxon Mobil, which jumped $2.88 to $79.31 as crude oil futures remained above $30 a barrel.
But the bond market--which often sees higher oil prices as an inflation threat--seemed largely unfazed. The yield on the bellwether 30-year Treasury bond inched up to 6.24% from 6.22%, but other yields were mixed.
And gold continued to slide, with near-term futures down $6.80 to $301.70 an ounce in New York.
Still, analysts say fear of future Federal Reserve interest rate hikes will continue to weigh on stocks and bonds.
Asian markets also are suffering on rate worries: South Korean stocks slid 3.4% on Tuesday while Hong Kong sank 2.9%. In Europe most markets were sharply lower, with the German market sliding 3.3%.
Fed Chairman Alan Greenspan will testify before the House Banking Committee on Thursday.
Among Tuesday’s highlights:
* Tech stocks ended mixed after their early slide. Intel fell as low as $105.25 but ended at a record high, up $2.13 to $112.
Among other big names, Apple rose $3.19 to $119, Compaq surged $2.31 to $27, and Agilent gained $5.44 to $81.88, but Cisco Systems fell $2.50 to $128, Microsoft lost $1.06 to $98.56 and EBay was off $5.63 to $148.50.
* Rambus rallied for a second day, surging $40.30 to $151.73, on expectations that Intel will reaffirm support for Rambus’s computer-chip interfacing technology. An Intel vice president said at a conference that “there’s a real benefit” from Rambus technology that becomes more apparent as chip speeds increase.
* Energy stocks moving up sharply included Chevron, up $3.69 to $77.50; Halliburton, up $2.56 to $38.50; and ENI, up $3.31 to $54.19.
* Among Southland issues, Earl Scheib jumped 75 cents to $3.88. Lawndale Capital Management of San Francisco said it has a 5.5% stake in Scheib and wants to work to boost shareholder value. The stock has slumped from $6.50 over the last year.
Market Roundup, C8
