Advertisement

Nasdaq Leads Broad Advance; Dow Pulls Back

Share via
From Times Wire Services

Blue chip stocks turned lower Monday, giving back early gains and halting a rally sparked by news that the economy hasn’t slowed as much as feared.

Still, the broad market advanced, led by technology stocks.

The Dow Jones industrial average lost 75.08 points, or 0.7%, to close at 10,734.97, retreating from a morning gain of 95 points and sliding back into negative territory for the year. A 110-point rally Friday had pushed the Dow into positive territory year-to-date for the first time in nearly two months.

The Standard & Poor’s 500 index also eased Monday, losing 0.3%.

However, the technology-dominated Nasdaq composite index rose 40.56 points, or 2.0%, to 2,116.24.

Advertisement

More than three stocks rose for every two that fell on the Nasdaq Stock Market, while five advanced for every four that declined on the New York Stock Exchange. Trading was active on both markets.

Despite Monday’s mixed results, the session closed out a rewarding month for beleaguered investors. The Nasdaq gained 15% in April, although it’s still down 58% from its high on March 10, 2000. The S&P; 500 rose 7.7% for the month and the Dow advanced 8.7%.

The Wilshire 5000 index, the broadest gauge of U.S. stock prices, advanced 8.1% in April, its biggest monthly climb since December 1991. It eked out a gain of 3.51 points to 11,512.35 on Monday.

Advertisement

“Overall, April was a surprisingly good month in the market,” said Alan Ackerman, executive vice president of Fahnestock & Co. “There’s lots to be grateful for.”

Trading opened Monday amid growing enthusiasm over Friday’s report revealing that the U.S. gross domestic product grew at an annual rate of 2% in the first quarter.

Grateful investors embraced the GDP data, which provided some reassurance for those who only recently began buying again after a litany of earnings disappointments from major companies. Analysts are now saying earnings for the year probably won’t be as bad as expected.

Advertisement

But some investors, wary after the hefty losses they’ve suffered over the last year, chose to lock in some of April’s gains before the market’s confidence has a chance to wane. Notably, the Nasdaq composite has risen nearly 29% from its closing low for the year, 1,638.80, reached April 4.

Stocks also were under pressure from another rise in bond yields Monday. Treasury yields rose sharply in the wake of fresh reports pointing to economic strength. However, long-term yields pulled back in late trading and closed only marginally higher.

Technology shares--which should benefit from any rebound in the economy--were among the day’s best performers. Broadcom gained $4.16 to $41.56, Texas Instruments rose $1.72 to $38.70 and Intel climbed 73 cents to $30.91.

A broader range of stocks pulled the Dow lower, however. Banker J.P. Morgan Chase fell $1.87 to $47.98, Wal-Mart stumbled $1.09 to $51.74 and Coca Cola slipped 81 cents to $46.19.

Among Monday’s highlights:

* Shares of computer networking equipment makers rose. Cisco advanced $1.38 to $16.98, Juniper Networks gained $4.01 to $59.03 and Ciena advanced $4.77 to $55.06. JDS Uniphase, the biggest maker of parts used in fiber-optic equipment climbed $2.13 to $21.39.

* Cooper Cameron rose $3.44 to $63.06 after the maker of oil and gas pipeline equipment said it expects profit this year to beat forecasts by as much as 13%. Other oil field equipment and service companies also rose: BJ Services gained $1.80 to $82.25, and Smith International advanced $1.39 to $81.19.

Advertisement

* Accounting controversies hurt two stocks. Computer Associates fell $3.06 to $32.19 the day after the New York Times reported that the software maker has overstated sales and profits for years. The company said Monday it has complied with generally accepted accounting practices. Also, Dollar General lost $7.38, or 31%, to $16.50 after the retailer said it expects to restate earnings for the last three years because of accounting irregularities.

* Eli Lilly added $2.20 to $85 on a Barron’s report that the drug maker plans to market 10 new drugs in the next four years, even as it loses patent protection on its antidepressant Prozac in August.

Market Roundup, C10, C11

Advertisement