Nasdaq Sets Another Record; Dow Slides
In a bit of what baseball’s Yogi Berra used to call “deja vu all over again,” Nasdaq rose to another record Thursday and the Dow slid as investors dumped industrial and consumer products stocks in favor of tech and telecom shares.
The Nasdaq composite notched its second straight all-time high, led by the likes of JDS Uniphase and Qualcomm--two of last year’s superstars--in its busiest trading day ever. The telecom equipment makers’ earnings are expected to grow about 40% annually for the next five years, according to analysts.
But declines in Alcoa, Procter & Gamble and General Electric dragged down the Dow Jones industrial average.
Though they had been in favor earlier this month, industrial and consumer companies are “grounded by the relatively small size of their growth rates,” said Bob Finch of Aeltus Investment Management in Connecticut.
Nasdaq rose 38.22 points, or 0.9%, to 4,189.51; the Dow fell 138.06 points, or 1.2%, to 11,351.30; and the Standard & Poor’s 500 lost 10.33 points, or 0.7%, to 1,445.57.
The Russell 2,000 index of smaller stocks rose 1.4% to its fourth straight record.
More than 1.8 billion shares changed hands on Nasdaq, while New York Stock Exchange volume was a brisk 1.3 billion shares.
Three stocks fell for every two that rose on the Big Board.
Bond yields were little changed.
Among the equity highlights:
* Alcoa fell $4.63 to $73.50 after saying it will hike production about 7% by the end of the year, sparking fears aluminum prices may drop.
* Slumping consumer products stocks included P&G;, off $2.81 to $112.56; 3M, off $3.69 to $95.13; and GE, off $2.81 to $145.94.
Analysts were wary of a possible offer by P&G; to buy Warner-Lambert, as the drug sector’s merger poker game continues. Such a deal “might not add to earnings any time soon--and they’d have to issue a ton of stock to do it,” said Jon Burnham of Burnham Fund.
Warner-Lambert fell $1.06 to $93.75. American Home Products, Warner’s current proposed merger partner, gained 13 cents to $46.13; and Pfizer, which has made its own offer for Warner-Lambert, eased 63 cents to $36.38.
* JDS Uniphase vaulted $26.94 to $238.88. The stock is up 24% since JDS agreed to buy competitor E-Tek Dynamics on Monday in a bid to boost capacity. E-Tek zoomed $36.13 to $234.75.
Other fiber-optics equipment makers also rallied. Corning climbed $22.06 to $155.75, Ciena jumped $5.19 to $73.44, and Harmonic rose $9 to $110.13.
Elsewhere in the telecom sector, wireless giant Qualcomm, the best-performing stock in the S&P; 500 in 1999, soared $9 to $155.63. But shares are down 12% this year.
* Apple Computer rose $6.94 to $113.50 after saying it earned $1.03 a share in its latest quarter, beating published and unofficial “whisper number” estimates.
* Legato Systems skidded $23.88 to $29.75 on a profit shortfall.
* Human Genome Sciences and Affymetrix rocketed after CS First Boston put out a bullish report on the biotech stocks. Human Genome rose $18.38 to $211.50; Affymetrix soared $30.25 to $232.50.
* Visx plunged $13.13 to $32.25 after saying December orders for its eye-surgery lasers were weak.
* Aflac rose $3.06 to $40.69 as the insurer was raised to “buy” from “market perform” by Donaldson, Lufkin & Jenrette.
* Among Southland stocks, Bergen Brunswig fell $1.38 to $8.50 as the drug wholesaler was downgraded to near-term “neutral” from near-term “buy” by Merrill Lynch.
Market Roundup, C5
