Dow Close Highest Since June
Blue-chip stocks crawled higher Monday as more investors pushed into the market, fearful of missing out on a continuing rally tied to the economy’s apparent rebound.
But the Nasdaq composite index surrendered a midday rally and closed slightly lower, as profit-taking hit some tech issues.
Still, winners edged losers on Nasdaq and on the New York Stock Exchange.
“The entire focus of the market has shifted away from what can go wrong to now a better balance between what could go wrong and what could go right,” said Rick Meckler, president of investment firm LibertyView. “The economic news has been incredibly good.”
The blue-chip Dow Jones industrial average rose 38.75 points, or 0.4%, to 10,611.24, its highest close since June 21.
The tech-heavy Nasdaq composite index slipped less than a point to 1,929.49. The Standard & Poor’s 500 index rose 3.95 points, or 0.3%, to 1,168.26.
The NYSE observed two minutes of silence before the opening to mark six months since the Sept. 11 terrorist attacks. The attacks shuttered Wall Street for nearly a week--the longest shutdown since the Depression--and prompted a massive sell-off when the market reopened.
The Dow has climbed 29% from its post-attack lows, the Nasdaq is up 36% and the S&P; 500 has advanced nearly 21%.
The broad market erased early losses Monday, adding to strong gains last week, as investors bet the U.S. economy is on the mend. The Nasdaq index surged 7% last week.
But worries that stocks have come too far, too fast as well as concerns about growing tensions in the Middle East kept investors’ enthusiasm in check, analysts said.
The government reported that sales at U.S. wholesalers had the largest gain in 19 months in January and inventories dropped to a two-year low, continuing a recent string of upbeat economic news that has prompted policymakers to declare an end to the recession.
Analysts caution, however, that a rebound could be mild and stock valuations are creeping ahead of the historical average.
Banking giant J.P. Morgan was among the Dow’s biggest gainers, rising $1.56 to $36.30. The company said it wants to cut costs 10% to 15% and financial weekly Barron’s reported bargain-hunters were taking interest in the stock.
American Express, another Dow stock, gained $1.08 to $41.55 after Deutsche Banc Alex. Brown raised its rating on the stock.
The bond market was quiet. The yield on the benchmark 10-year Treasury note, which surged to an eight-month high Friday, was unchanged at 5.32%.
Among Monday’s highlights:
* Networking company Ciena jumped $1.02 to $10.29, and its acquisition target ONI Systems rose 56 cents to $7.11 on speculation Cisco Systems would buy them both, Reuters reported. Cisco fell 38 cents to $17.42.
Other networking heavyweights also climbed. Corning rose $1.05 to $8.90 and Juniper Networks gained $1.40 to $14.71.
* Semiconductor shares eroded recent gains. Chip giant Intel lost 75 cents to $33.42, and the SOX semiconductor index dropped 2.4%. Chip maker Intersil fell $5.48 to $31.17 after saying it plans to buy Elantec Semiconductor for about $1.4 billion to expand into additional markets such as those for optical storage chips used in compact discs and DVDs as well as flat-panel displays. Elantec rallied $4.57 to $45.77.
* Oil shares rallied as crude prices rose again on escalating Mideast tensions. Exxon Mobil rose 58 cents to $43.49, tracking the rise in oil prices. ChevronTexaco rose $1.45 to $89.10. Crude oil futures rose 47 cents to $24.31 in New York trading.
* Defense shares rose. Northrop Grumman was up $2.54 to $108.46, Lockheed Martin climbed $1.01 to $57.75 and General Dynamics gained $3.85 to $90.85.
Market Roundup, C10-11
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