Major Indexes Add to the Gains of Recent Days
Stocks ended mixed Thursday, with key indexes moving up even though more stocks fell than rose.
Wall Street’s bulls took heart because the market has mostly held on to the big gains racked up early in the week, instead of succumbing to profit taking.
The Dow industrials rose 45.53 points, or 0.4%, to 10,289.21, while the Nasdaq composite index inched up 4.88 points, or 0.3%, to 1,730.44, the highest since April 22.
Nasdaq’s gain was its fourth straight, the first such streak since early April. The index is up 8.1% this week, after falling in eight of the previous nine weeks.
Stocks surged Monday and Tuesday as upbeat reports on the economy dispelled some of the gloom that has weighed on Wall Street over the last two months and pushed key indexes to their lowest levels since October.
“You have a general underlying trend of an improving economy,” Dean Gulis, who helps manage $70billion at Loomis, Sayles & Co. in Bloomfield Hills, Mich., told Bloomberg News. Still, he said, the recovery is “a little ragged and it’s going to be slow to be reflected in corporate earnings.”
Investors’ caution showed up in market breadth figures Thursday: Losers outnumbered winners by 17 to 14 on the New York Stock Exchange and by 19 to 16 on Nasdaq.
Even so, profit taking overall has been limited this week, unlike the previous week, when a sharp rally May 8 was followed by two days of renewed selling.
One of the weakest sectors this year--telecom--rallied Thursday after BellSouth said it is on track to meet 2002 growth targets. BellSouth surged $1.74 to $33.50.
After regular trading ended, Dell Computer said first-quarter earnings topped expectations. Dell shares, up 15 cents to $27.85 in regular trading, rose to $28.06 in after-hours activity.
In other markets, Treasury bond yields pulled back from recent increases as investors bet that the economy’s recovery won’t result in sharply higher interest rates soon. The 10-year T-note yield fell to 5.17% from 5.24% on Wednesday.
Among Thursday’s highlights:
* Telecom stocks advancing included SBC Communications, up $1.27 to $34.68; Sprint FON, up $1.01 to $16.96; and BT Group, up $4.28 to $40.90.
* Retailers were strong on optimism about the economy. Wal-Mart led the way, up $1.58 to $58.35. Other winners included Dillard, up $2.18 to $29.37; Target, up 97 cents to $43.37; and Sears, up $1.06 to $56.75, a multi-year high.
* In the tech sector, Cisco Systems jumped 45 cents to $17.01, Intel rose 53 cents to $30.77 and IBM was up 95 cents to $85.45.
* Home builders were broadly lower after the government said housing starts fell in April. Hovnanian Enterprises slumped $4.06 to $25.02 and Ryland lost $5.44 to $108.51.
* In the brokerage sector, Instinet jumped 75 cents to $7.75 after the Wall Street Journal said the electronic trading system is in talks to buy rival Island. A merger would end a price war between the institutional trading systems.
Charles Schwab gained 9 cents to $12.28. The discount broker said it will launch a computer-driven stock rating system that will grade 3,500 stocks, offering clients what Schwab says is an objective alternative to stock research from major brokerages.
* Two new stock issues made their debuts. Retailer Aeropostale (ticker symbol: ARO) sold 12.5 million shares at $18 each. They surged to close at $27.75. But security systems firm Verint Systems (VRNT), which sold 4.5 million shares at $16, fell to $14.49 on its first trading day.
Market Roundup, C5-6
