Key Indexes Rebound as Bargain Seekers Make a Play
Wall Street bounced back Wednesday--or at least, its major indexes did.
Bargain hunting helped pull key indexes higher, though more stocks fell than rose on the New York Stock Exchange and on Nasdaq.
Still, traders welcomed the Nasdaq composite index’s 67.27-point, 2% gain, to 3,523.10. Nasdaq had fallen in eight of the previous nine sessions, on Tuesday reaching its lowest close since May 31.
The Dow industrials gained 64.74 points, or 0.6%, to 10,784.48.
Nasdaq closed near its high for the day, while the Dow was off its best levels. But losers outnumbered winners by 20 to 18 on Nasdaq and by 16 to 13 on the NYSE.
“I’d characterize the day as a rebound from the oversold levels of [Tuesday], specifically in tech stocks,” said Bob Streed, portfolio manager for the Northern Select Equity fund. “This is just a bounce you’re getting in some stocks. I don’t think these gains are sustainable.”
The market has been dogged for the last six weeks by concerns about weakened corporate earnings growth in a slowing economy.
On Wednesday, companies joining the list of firms warning about third-quarter earnings included building products maker Masco, book publisher Houghton-Mifflin and construction-industry-materials maker Martin Marietta.
Masco and Houghton-Mifflin issued their warnings after trading ended, while Martin Marietta’s warning, issued early in the day, sent its stock down $3.02 to $34.23.
Another firm issuing a warning after trading ended was Dell Computer--perhaps setting a tone for more trouble in the tech sector today.
In other trading, bond yields edged higher Wednesday, as some traders remained worried about the Federal Reserve’s latest inflation warning, issued Tuesday.
Oil prices pulled back after inventory figures for the latest week showed rising supplies. Near-term oil futures in New York fell 64 cents to $31.43 a barrel.
Among Wednesday’s highlights:
* Semiconductor-related stocks led Nasdaq higher. Xilinx, which makes chips used in telecommunications switches, gained $4.88 to $89.63. Analysts at Credit Suisse First Boston and Prudential Securities Inc. repeated “strong buy” ratings on the stock.
Chip-equipment maker Novellus Systems gained $5.88 to $47.75. Other chip stocks rising included Texas Instruments, up $2 to $50.75, and Vitesse, up $6.31 to $87.25.
But Oracle lost $1.38 to $68.13. A Robertson Stephens Inc. analyst said the stock isn’t likely to rally much as software sales growth slows.
And Microsoft fell $1.13 to $55.44, leaving shares at their lowest since November 1998. The firm has slipped to the fourth-largest in the U.S., with a market value of $298 billion, with Pfizer behind it at $273 billion.
* Some heavy-industry shares continued to rebound. DuPont rose $1 to $45.38 and Bowater gained $1.88 to $49.31.
* Airline shares gained as oil prices fell. Delta jumped $1.88 to $45.75. Alaska Airlines rose 63 cents to $24.50.
* Energy stocks, in turn, were sharply lower. Chevron lost $2.06 to $84.81; Amerada Hess fell $2 to $65.38.
* Utility stocks were hit by profit taking. Duke Energy lost $3.19 to $82.69 and Enron slid $2.50 to $83.06.
* Among new issues, Oplink Communications soared $15.63 to $33.63 in its trading debut on Nasdaq. The fiber-optics company’s ticker symbol: OPLK.
Market Roundup: C9-10
