Dow Rises 1.6%, Trailing Nasdaq
It was probably better than a poke in the eye with a sharp stick, but the rally in blue-chip stocks on Thursday still lagged the latest explosion on Nasdaq.
The Dow Jones industrials rose 154.20 points, or 1.6%, to 10,010.73, trailing Nasdaq’s gain of 3.1% to a record 5,046.86.
The broader Standard & Poor’s 500 index gained 34.99 points, or 2.6%, to 1,401.69, as drug shares rebounded with the usual suspects in the tech sector.
“A lot of people are tired of hearing about the ‘new economy’ vs. the ‘old economy,’ but that’s where it comes down,” said Ralph Acampora, director of technical research at Prudential Securities.
Acampora, one of Wall Street’s most relentlessly bullish analysts, said he expects Nasdaq to reach 6,000 within 12 to 18 months as tech stocks continue to surge.
In the bond market Thursday, yields eased as the Treasury Department repurchased $1 billion of long-term debt, the government’s first buyback in seven decades.
The 30-year Treasury bond yield slipped to 6.15% from 6.16% Thursday. Some analysts said the decline in yields in recent weeks effectively priced in the Treasury’s near-term buyback plans.
Among Thursday’s market highlights:
* Major tech names leading the day’s rally included Cisco Systems, up $6.94 to a record $139.31; Microsoft, up $4.44 to $100; Dell, up $3.50 to $50.44; Compaq, up $1.56 to $28; Hewlett-Packard, up $11 to $151.88; and Texas Instruments, up $8 to $180.
Also, I2 Technologies, a maker of software that helps companies schedule manufacturing, soared $30.25 to $220.88.
* The Amex disk drive index climbed 11%, its best day since Nov. 10. Komag gained 81 cents to $3.44 and Read-Rite climbed 66 cents to $4.44.
* The Internet sector was particularly hot. VeriSign, a maker of Web-security software, rose $37.75 to $240.75 in the wake of its deal this week to buy Network Solutions, the issuer of Internet addresses for $17 billion.
NaviSite jumped $34.94 to $300.94 after announcing a 2-for-1 stock split effective April 5 for holders of record March 22. The company, which hosts Web sites for companies, also reported its second-quarter loss narrowed to 41 cents a share. Analysts had expected a loss of 63 cents. Internet venture capital company CMGI, which has a majority stake in NaviSite, rose $6.88 to $145.38.
And Software.com, which supplies e-mail systems to Internet service providers, rose $32.69 to $146.81 after it agreed to buy closely held Atmobile.com for $428 million in stock to gain its software for wireless Internet messaging.
* America Online, which is buying Time Warner, gained $6.50 to $61.38 after Steve Case, AOL’s chairman, said the No. 1 online service provider is discussing an alliance with AT&T.;
The two companies could jump-start high-speed Internet access in the U.S. if the two form a partnership to jointly sell each other’s services, Case said. AT&T;, the largest U.S. long-distance phone company, eased 38 cents to $52.63.
* Health-care and drug companies rose for a second day as investors bet they have fallen too far this year. Bristol-Myers Squibb, down 16% this year, rose $6 to $53.75, and Merck, which has lost 9%, gained $4.31 to $61.13.
But many other “old economy” stocks, including International Paper and 3M, fell. IP fell $1.27 to $34.75 and 3M fell $1.63 to $80.94.
General Electric also lost ground, down $1.31 to $129.
* Orapharma (ticker symbol: OPHM), which develops treatments for mouth infections and disorders, rose $13.25 to $31.25 in its first day of trading.
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Market Roundup, C5
