Nasdaq Rises 5.4% as Tech Issues Rebound
Post-Thanksgiving bargain hunting and investor optimism that the political maelstrom surrounding the presidential election may be nearing an end helped push stock prices higher Friday.
In a shortened holiday session that ended at 10 a.m. PST, the tech-focused Nasdaq composite index recovered its footing--at least for a day--after falling for five straight trading sessions. Nasdaq jumped 149.04 points, or 5.4%, to 2,904.38.
The blue chip Dow Jones industrial average closed up 70.91 points, or 0.7%, at 10,470.23, and the Standard & Poor’s 500 index was up 19.41 points, or 1.5%, at 1,341.77. Advancing issues outnumbered decliners 2 to 1 on both Nasdaq and the New York Stock Exchange.
Traders seemed primed to end a tough week on a high note. The markets have been roiled throughout November amid disappointing earnings reports, political uncertainty related to the presidential race and renewed fears of rising inflation.
“It looks like we’re having a snap-back rally on the heels of a positive decision for the Bush camp in the presidential election and a bounce off the recent Nasdaq lows,” said Paul McEnroe, a trader at Dresdner Bank in New York.
Still, some analysts cautioned against reading too much into Friday’s rally, which occurred on a day that traditionally sees some of the lightest trading volumes of the year. Among NYSE issues slightly under 500 million shares changed hands, while volume on Nasdaq was an equally meager 791 million shares.
“With such light trading volume, [stock price] movement is magnified and may not be indicative of broader sentiment,” said Bruce Simon, a money manager with Glenmede Trust Co. in Philadelphia.
Depressed technology stocks led the way higher after a string of down sessions that have pushed the Nasdaq market to its lowest point in more than a year.
Investors also found solace in political news out of Florida that left many with the impression that Texas Gov. George W. Bush will emerge as the winner in the hotly contested presidential election. The Florida Supreme Court’s decision Thursday not to force Dade County to continue a hand recount of ballots was seen as a big blow to Vice President Al Gore’s chances of picking up the number of votes needed to overcome Bush’s slim lead.
However, after the market closed Friday, the U.S. Supreme Court agreed to hear arguments Dec. 1 on Bush’s appeal of a state court ruling that allowed hand recounts of votes in some Florida counties. The unexpected development raised the prospect of continued uncertainty in the markets next week as investors await the high court’s decision.
The undecided election has taken its toll on the markets, as investors have sought some clue as to what economic direction the country is headed. A series of third-quarter earnings disappointments by leading high-tech companies and increasing concerns about the profit outlook for the fourth quarter and early 2001 haven’t helped.
Even with Friday’s rally, the Dow and the S&P; 500 are down nearly 9% for the year and Nasdaq is off almost 29%.
Among Friday’s market highlights:
* Beaten-down Internet commerce companies rallied on the hopes of increased consumer spending during the holiday shopping season. EToys, the largest Internet-only toy store, surged 59 cents to $1.81, a 49% jump.
Also, Amazon.com, the No. 1 Internet retailer, rose $3.75 to $28.94, Buy.com gained 25 cents to $1.25 and Barnes & Noble.com, the No. 2 Internet bookseller, rose 31 cents to $2.88.
The Bloomberg electronic commerce index surged 4.79 points, or 14%, to 39.46.
* Among Net equipment makers, Juniper Networks rose $12.75 to $132.38 after a brutal week in which a Morgan Stanley analyst downgraded his rating of the entire networking sector. Juniper’s stock had shed more than 20% of its value on the downgrade.
Other winners included Cisco Systems, up $2.13 to $52.69; Alcatel, up $5.88 to $52.50; and Brocade Communications, up $7.94 to $189.44.
* On the downside, a few cable equipment companies were pounded after AT&T; Broadband, AT&T;’s cable unit, announced it was delaying purchase of pending equipment shipments in a cost-cutting measure. Shares of Antec fell $2.36 to $8.70, CommScope tumbled $5.75 to $18.13 and Scientific-Atlanta lost $2.25 to $49.19.
* Semiconductor-related stocks where hot. Teradyne gained $5.38 to $38.50, Broadcom rose $6 to $117.13 and PMC-Sierra jumped $5.44 to $113.44.
* Investment bank J.P. Morgan, a Dow component, rose $4.19 to $142.19, helped by a published report that its proposed merger with Chase Manhattan has been approved by the Securities and Exchange Commission.
* The dollar rose to a nine-month high against the yen after Mitsui Construction said it will ask creditors to forgive some of its debt, fanning concern about Japan’s economic recovery. The yen fell to 111.36 per dollar from 110.25 the day before--its fifth straight loss and its lowest level against the greenback since hitting 111.49 on Feb. 22.
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Associated Press and Bloomberg News contributed to this report.
Market Roundup, C4-5
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Holiday Bounce
After watching Nasdaq slide more than 18% in November, investors finally had reason to give thanks Friday as tech stocks rallied strongly.
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Nasdaq composite index, daily closes
Friday: 2,904.38, up 149.04
Source: Bloomberg News
