Upbeat Forecast Boosts Stocks
Wall Street bounced back Tuesday after a week of losses, helped by some upbeat expectations for corporate results in 2003.
The Dow Jones industrial average rose 100.85 points, or 1.2%, to 8,574.26, after losing 458 points over the previous seven sessions.
The Nasdaq composite index added 23.62 points, or 1.7%, to 1,390.76, though that was less than half of Monday’s loss.
“Right now, the market is trying to regain its confidence,” said Robert Harrington, co-head of listed block trading at brokerage UBS Warburg.
After rallying sharply from five-year lows reached in October, stocks pulled back last week amid disappointing economic reports that suggested the pace of business activity may be weaker than expected in 2003.
But Tuesday, a semiannual survey of corporate purchasing managers by the Institute for Supply Management showed 70% of manufacturers and service companies said they expect sales to rise next year.
“This forecast should be received as a source of optimism,” said Norbert Ore, chairman of the group’s business survey committee.
“As each day goes by, there will be more and more evidence that the economy is perking up,” Joseph McAlinden, chief investment officer at Morgan Stanley Investment Management, told Bloomberg News.
Traders said the market also may have been cheered Tuesday by President Bush’s choice of William H. Donaldson, a well-known Wall Street figure, to head the Securities and Exchange Commission.
There was little reaction to the Federal Reserve’s decision to hold interest rates steady. That had been expected.
On the New York Stock Exchange, rising stocks outnumbered losers by 22 to 10. The margin was 20 to 13 on Nasdaq.
In the Treasury bond market yields edged higher as stocks recovered.
Among Tuesday’s highlights:
* Computer hardware and software shares led the market after Maxtor, a maker of disk drives, boosted its fourth-quarter sales and profit forecasts. Maxtor surged $1.11 to $5.72.
Other tech winners included Micron Technology, up 98 cents to $13.86; Novellus Systems, up $1.87 to $30.84; and Adobe Systems, up $1.15 to $26.01.
But Nokia fell 59 cents to $17.43 after the world’s largest mobile phone maker said its fourth-quarter revenue would be weaker than expected.
Computer game makers suffered another day of selling. Activision slid $1.10 to $17.02, and Midway Games was down 7 cents to $5.63.
* Avon Products jumped $2.50 to $54.75 after raising its fourth-quarter outlook. Among other consumer-related stocks, Procter & Gamble gained $1.27 to $87.65 and Coca-Cola was up $1.40 to $46.50.
* Airline stocks inched up after tumbling Monday, when United Airlines parent UAL filed for bankruptcy protection. UAL added 14 cents to $1.07, Delta gained 38 cents to $12.79, Alaska Air rose 42 cents to $22.45 and AMR, parent of American Airlines, was up 20 cents to $7.75.
* Some energy stocks gained as natural gas futures prices hit 19-month highs in New York amid cold weather in much of the country that is drawing down supplies.
Burlington Resources rallied 99 cents to $42.18, Unocal was up 49 cents to $31.20 and Apache added 51 cents to $56.85.
Gas for January delivery on the New York Mercantile Exchange rose 27.7 cents, or 6.4%, to $4.64 per million British thermal units, the highest closing price for a most-active contract since May 15, 2001.
In the week ended Nov. 29, U.S. gas supplies fell to 2.97 trillion cubic feet, down 6% from the beginning of November, according to government data.
* Smaller stocks in general were stronger than blue chips. The Russell 2,000 index rose 1.9% compared with the Dow’s gain of 1.2%. The Standard & Poor’s small-cap stock index rose 2%.
* Gold prices continued to pull back after surging last week. Near-term gold futures in New York fell $2.30 to $323.50 an ounce.
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Market Roundup, C8-9
