Dow Gains as End of Quarter Nears
Blue chips enjoyed a solid advance Wednesday--the second in a row--as investors continued their search for bargains and big institutions bought stocks to dress up their portfolios as the end of the first quarter approached.
But tech shares, which many market analysts predict will be the last to recover from recession, rose only slightly after struggling to stay in positive ground.
The Dow Jones industrial average closed up 73.55 points, or 0.7%, at 10,426.91. That followed the Dow’s 71-point advance Tuesday, which broke a four-session losing streak that began after the Federal Reserve indicated it might raise interest rates this year to keep economic growth steady.
That stretch of declines made the blue chips much more attractive to investors Wednesday.
The market’s broader indicators had a more modest advance. The Nasdaq composite index inched up 2.58 points, or 0.1%, to 1,826.75, and the Standard & Poor’s 500 index gained 6.09 points, or 0.5%, to 1,144.58.
Winners led losers by a 2-1 margin on the New York Stock Exchange and by about 4 to 3 on Nasdaq. Trading was light, as it has been all week as traders prepared to celebrate Passover, which began Wednesday. Also, the market will be closed in observance of Good Friday, making today’s session the last of the quarter.
Analysts attributed some of the market’s upturn to what’s known as window dressing, an end-of-the-quarter practice in which institutional investors, including mutual fund managers, buy shares that have performed well recently, to make their portfolios look more impressive in reports to shareholders.
The stock market was helped by relative calm in the bond market, where yields were little changed.
Financial stocks gained after a Credit Suisse First Boston analyst said banks’ profits probably will benefit from higher margins as revenue from lending increases while losses from bad loans stop growing.
Citigroup, the biggest financial-services company and parent of investment bank Salomon Smith Barney, gained 85 cents to $50. American Express climbed 59 cents to $41.19.
Hopes for recovery boosted shares of many manufacturers and commodity companies. Heavy-equipment maker Caterpillar gained $1.24 to $57.49.
The tech sector was mixed. IBM rose 49 cents to $103.39. But optical networker Ciena fell 33 cents to $8.07, a day after saying it was cutting 22% of its work force.
Gold shares continued their recent climb as the precious metal rose $5.40 to $302.20 an ounce.
Wall Street’s next big challenge will be first-quarter corporate earnings reports. Though the results will be better than the previous quarter and even slightly above expectations, they won’t be robust, analysts say.
Among Wednesday’s highlights:
* Shares of defense contractors rose after a trade publication reported that the Department of Defense might allow them to earn greater profits on contracts. Lockheed Martin, the largest defense firm, advanced 92 cents to $58.15. Northrop Grumman climbed $4 to $111.50. Boeing, the largest aerospace company, rose $1.54 to $47.33 and United Technologies, which makes Pratt & Whitney jet engines, rose $1.75 to $73.75.
* Oil stocks rallied after U.S. oil inventories had their biggest weekly decline since October, raising concern about supply at a time of year when refiners are preparing to boost gasoline production. Crude oil futures rose 51 cents a barrel to $25.87 in New York trading. Exxon Mobil rose 21 cents to $43.95 and ChevronTexaco added $1.50 to $90.50. Oilfield services firm Schlumberger gained $1.55 to $58.93 and driller Nabors Industries jumped $2.34 to $42.32.
* Morgan Stanley gained 87 cents to $56.66 after selling $7.3billion in bonds--the biggest debt offering by a securities firm.
* American Greetings climbed $4.11 to $18.59 after saying profit may beat expectations this year.
* Genzyme fell $5.42 to $43.37 after its General division said first-quarter earnings will be below forecasts.
* Parametric Technology lost $1.27 to $6.09. The company said it may report a loss for its fiscal second quarter, which ends Saturday.
Market Roundup, C6-7
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