Wall St. Recoups Recent Losses
Wall Street on Monday managed to shake off the latest anthrax scare and post a strong advance, recouping much of last week’s losses.
Broad-based buying lifted such sectors as technology, drugs, banking and insurance, and pushed the Dow Jones industrials up 172.92 points, or 1.9%, to 9,377.03.
The Nasdaq composite rose 36.77 points, or 2.2%, to 1,708.08.
In other trading, gold prices plunged to a six-week low, wiping out the last of the gains reaped in the aftermath of the Sept. 11 terrorist attacks.
The euro currency fell to its weakest level against the dollar since the first week of September.
In the stock market, winners topped losers by 3 to 2 on the New York Stock Exchange and by 21 to 15 on Nasdaq, though trading was fairly slow.
Quarterly earnings reports helped boost sentiment, even though many companies continue to report sharply lower results.
Conglomerate 3M, for example, jumped $5.22 to $107.39 even though the company reported lower earnings. Analysts said the firm’s cost-cutting efforts are likely to bolster future results.
“People are more concerned at the moment about missing out on the market’s next move up than suffering the next big decline,” said Richard A. Dickson, a technical analyst at Hilliard Lyons in Louisville, Ky.
News of more deaths tied to anthrax infections may have held the market back early in the day, but buyers took control in afternoon activity, analysts said.
Strength in European markets helped Wall Street’s mood. The main German stock index jumped 2.3%. The main British index gained 1.1%.
In the Treasury bond market, yields continued to edge up, hurt in part by competition from a $9.4-billion bond offering by Ford Motor. It was the sixth-largest corporate bond sale in history and attracted heavy interest.
Among Treasury issues, the yield on the five-year T-note rose to 3.86% from 3.82% Friday.
In commodities trading, near-term gold futures slumped $4.60 to $275.50 an ounce, the lowest since before the terrorist attacks. After the attacks, gold rose as high as $293 as some investors sought a safe haven. But as the stock market has recovered, gold’s appeal has faded again.
“Every doctor, dentist and plumber who bought gold as a safe haven is selling out now,” Leonard Kaplan, president of Prospector Asset Management in Evanston, Ill., told Bloomberg News.
In currency markets, the latest wave of disillusionment centers on the euro, which on Monday eased to 89.2 cents, lowest since before the attacks.
Traders said the euro is under pressure because investors believe the European Central Bank won’t cut interest rates this week. Critics say the bank is delaying an economic rebound in Europe by refusing to quickly lower rates.
Among Monday’s highlights:
* Tech stocks were led higher by Intel, up $1.15 to $25.30; Microsoft, up $2.26 to $60.16; IBM, up $2.60 to $105.25; Applied Materials, up $2.22 to $34.77; FreeMarkets, up $1.75 to $18.46; and EBay, up $1.13 to $53.08.
But printer maker Lexmark International plunged $5.58 to $44.77 after reducing fourth-quarter earnings estimates.
* In the drug sector, Merck rose $1.88 to $67.26, Eli Lilly gained $1.55 to $77.51 and Bristol Myers Squibb jumped $1.47 to $59.70.
Many biotech shares also rallied, driving the Amex biotech index up 3.8%. Biogen gained $2 to $57.02 and Imclone Systems rose $2 to $61.55. But Amgen lost 8 cents to $59.84.
* Bank stocks saw renewed buying, led by Bank of America, up $1.38 to $58.41, and J.P. Morgan Chase, up $1.44 to $35.31.
Insurers also rallied. American International Group gained $3.21 to $84.81, Chubb surged $3.76 to $77.06 and Progressive leaped $7.22 to $144.61.
Market Roundup, C8-C9
