Dow Adds 60; Nasdaq Gains After Early Loss
Wall Street caught its breath after Tuesday’s dive, as major indexes rose Wednesday--led, once again, by Nasdaq.
Paced by rebounds in battered sectors such as drugs and heavy-industry shares, the Dow Jones industrial average ended up 60.50 points, or 0.6%, at 9,856.53.
But the Dow had been up as much as 122 points before fading. Its net gain for the day represented a recouping of just 16% of the 374-point plunge Tuesday, when Procter & Gamble warned of weaker-than-expected earnings.
The Nasdaq index, by contrast, had been down as much as 125 points early Wednesday before resurging to end up 49.42 points, or 1%, at 4,897.26.
Still, losers topped winners by small margins on the New York Stock Exchange and on Nasdaq.
In the blue-chip arena, buyers took advantage of recent sharp declines in stocks such as Johnson & Johnson, which jumped $2.50 to $71, and Caterpillar, which gained $1.13 to $34.94.
But most of the buying power again appeared to be focused on technology issues. Software giant Oracle, for example, soared $8.19 to a record $83.13 after saying it formed a venture with Chevron and Wal-Mart to create an online marketplace connecting convenience stores with suppliers.
In the bond market, yields edged higher after the Federal Reserve’s latest report on regional economic activity said business remained strong. The 30-year Treasury bond yield rose to 6.16% from 6.14%.
In Mexico, the main stock index soared to a record as investors bet a decision by Moody’s Investors Service to raise Mexico’s debt rating to investment grade will cut company financing costs and bolster profits. The benchmark IPC index gained 289.25 points, or 3.6%, to 8,295.39. In U.S. trading, Mexican phone giant Telmex zoomed $3.31 to $76.31.
In Europe, stock markets were lower, but shares held up much better than expected, considering the Dow’s loss the previous day.
Among Wednesday’s highlights:
* Procter & Gamble remained out of favor, sliding $3 to $58 after diving $26.44 on Tuesday. More analysts jumped off P&G;’s bandwagon, downgrading the stock.
Elsewhere in the group, Clorox sank $2.88 to $33.38 on concern that costs for the plastic resin used in its Glad bags could hurt profit. P&G; rival Colgate Palmolive fell $2.81 to $43.94, and Gillette lost $2.31 to $30.13.
* Drug stocks rallied as bargain hunters shopped. Bristol-Myers Squibb climbed $4.25 to $47.75, and Schering-Plough added $3.31 to $33.81 after an analyst at PaineWebber raised his rating on the stocks to “buy” from “outperform.”
Pfizer rose $2.44 to $32.44 after Banc of America Securities upgraded the shares to “strong buy” from “buy.”
* Airline stocks rallied as oil prices fell. AMR, parent of American, soared $3.19 to $54.69. Delta gained $3.88 to $47.50.
But oil field service and equipment stocks fell after an analyst at Donaldson, Lufkin & Jenrette cut his rating on the industry to “market perform” from “outperform.”
Schlumberger fell $5.13 to $77.06, Cooper Cameron lost $3.44 to $65.81, and Global Marine slumped $4 to $22.31. DLJ’s report said crude prices could fall to the mid-$20s a barrel, spooking short-term investors.
* Tech issues continuing to post dramatic gains included I2 Technologies, up $22.19 to $190.63; Tibco Software, up $29.56 to $134.94; Priceline.com, up $8.94 to $87.56; Pharmacopeia, up $28.50 to $97.50; Gemstar, up $9.25 to $94.25; and Check Point Software Technologies, up $18.44 to $271.50.
But profit-taking clipped some tech highfliers, such as JDS Uniphase, down $11.75 to $275.63. Chip stocks were hard hit, with Applied Materials sliding $4.75 to $179.38, Motorola falling $7.88 to $169.44 and Texas Instruments losing $8 to $172.
* Jackpot Enterprises rose $6.88 to $21 after saying it will establish J Net Ventures, a $100-million Internet-related investment fund.
* Qwest Communications International dropped $2.19 to $53.81. The New York Times, citing unnamed executives close to the situation, said Deutsche Telekom, Europe’s largest phone company, ended negotiations to acquire Qwest or Qwest’s pending merger partner, US West. Qwest, however, is still in talks with an unnamed “major telecommunications” company, a spokesman said.
US West rose $1.50 to $69.63.
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Market Roundup, C8
