Nasdaq Up 3.7% as Techs Revive; Utilities Slide
Battered technology stocks rebounded Tuesday, leading Nasdaq to its biggest gain since July. But recently hot utility stocks took a dive.
Oil prices pulled back a bit, but new inventory data reported after trading ended showed U.S. crude supplies continue to fall.
In currency markets the euro again hit a record low.
On Wall Street a surge in tech shares sent the Nasdaq composite up 139.12 points, or 3.7%, to 3,865.64, the biggest one-day advance since July 12.
The rebound followed a 12% slide in the Nasdaq index from Sept. 1 through Monday, amid soaring oil prices and growing worries about the economy’s slowing pace.
The Dow industrials, meanwhile, eased 19.23 points, or 0.2%, to 10,789.29 on Tuesday, weighed down by continued selling of heavy-industry and retail shares.
“After a pretty significant sell-off in the Nasdaq, investors were looking for bargains,” said Alan Skrainka, chief market strategist at Edward Jones in St. Louis. “Once the rally got going, it just sort of fed on itself.”
“Many of the stocks were down to ‘support’ zones--price levels they needed to hold in order to prevent a more precipitous downslide--providing opportunities for risk-takers,” said A.C. Moore, chief investment strategist at Dunvegan Associates.
But the broad market was mixed, though most major indexes finished higher. Winners topped losers by 23 to 17 on Nasdaq, whereas losers had the edge on the New York Stock Exchange.
Analysts said the “Four E’s”--the euro’s value, the U.S. economy, energy prices and corporate earnings--may continue to dampen investors’ buying enthusiasm in the near term.
The euro fell to a new low of 85.2 U.S. cents Tuesday, despite supportive words from a host of European government leaders.
In the bond market, long-term Treasury yields pulled back modestly after surging last week.
In energy trading, near-term crude futures eased 37 cents to $36.51 a barrel in New York. But late in the day, the American Petroleum Institute said U.S. crude inventories fell a greater-than-expected 2 million barrels in the latest week, to 286.6 million.
Among Tuesday’s highlights:
* Intel helped lead the tech sector higher, surging $4.56 to $60.38. Rival Advanced Micro Devices gained $3.88 to $30.38.
Intel, which had fallen 25% since Aug. 31, was upgraded to “buy” from “market perform” by Banc of America Securities analyst Richard Whittington.
Other chip stocks up sharply included Micron Technology, up $7.19 to $65.69; Vitesse Semiconductor, up $7.44 to $87.63; and Applied Micro Circuits, up $17.06 to $193.31.
Other tech winners included Adobe Systems, up $10.88 to a record $152.88; Cacheflow, up $7.63 to $127.88; and Sanmina, up $7.06 to $102.38.
* Qualcomm led the telecom sector higher, jumping $7.69 to $77.50, highest since June. Traders said the stock may have gotten a lift from the Senate’s passage of the bill normalizing U.S.-China trade relations.
Among other telecom stocks, JDS Uniphase surged $10.13 to $107.94, Corning gained $17.50 to $308, Nokia rose $2.13 to $45 and Nortel Networks gained $3 to $71.
* On the down side, utility stocks were hammered. They have been among the market’s hottest stocks in recent months. Losers included Peco Energy, down $2.31 to $55.38; Edison International, down $1.48 to $22.38; and Duke Energy, down $2.22 to $79.33.
Oil and gas stocks also slid. Amerada Hess fell $4.13 to $69.50, Chevron slid $1.94 to $88.06 and Baker Hughes fell $1.52 to $36.13.
* Some industrial issues that recently warned of weaker profits fell further. Ingersoll-Rand dropped $4.06 to $35.69 and Rockwell lost $1.75 to $28.75.
* Wal-Mart and Home Depot led retail shares lower amid continuing worries about consumer spending. Wal-Mart slid $2.88 to $49.88 and Home Depot lost $2.06 to $53.
Market Roundup: C11, C12
