Nasdaq Takes Breather; Dow Rises Again

From Times Staff and Wire Reports

Stocks closed mixed Tuesday as investors awaited the outcome of the election and today’s Federal Reserve meeting.

Blue-chip indexes ended higher, while the Nasdaq market took a bit of a breather.

Traders in the Treasury bond market also marked time, as yields inched up amid the government’s sale of $22 billion of new five-year notes.

In other markets, oil prices slid, as did the dollar against the euro.


The Dow Jones industrials gained 106.67 points, or 1.2%, to 8,678.27, the highest close since Aug. 28, as some investors continued to hunt for bargains among blue chips.

But winners held only a modest edge over losers on the New York Stock Exchange.

On Nasdaq, losers were in the slight majority, though the composite index still rose 4.63 points, or 0.3%, to 1,401.17 -- the first close above 1,400 since Aug. 22.

Some analysts attributed Tuesday’s blue-chip rally, which gained momentum in the last hour, to investors anticipating a Republican-controlled Congress.


“If we get a sweep by the Republicans, that raises a lot of hope as far as tax incentives going forward. This market has a sense that the Republicans are going to recapture the Senate,” said Peter Cardillo, strategist at Global Partners Securities.

But the market has had momentum in its favor as well: After four straight weeks of gains, helped by better-than-expected third-quarter corporate earnings, many investors believe the bear market finally is over and that it’s a good time to buy stocks.

“You are hard pressed to sell into these kind of moves,” said Bryan Piskorowski, market commentator for Prudential Securities.

Anticipation of today’s Fed meeting also provided some lift. The market is expecting the central bank to cut its benchmark short-term interest rate by 0.25 point to 1.5% to help the economy.


In the bond market, short-term Treasury yields were little changed Tuesday, while longer-term yields edged up as the Treasury sold new five-year notes at a yield of 3.03%.

The government today will sell $18 billion of new 10-year notes. The yield on the existing 10-year note rose to 4.07% on Tuesday from 4.04% on Monday.

In currency trading, the dollar fell to a 3 1/2-month low of 99.9 cents against the euro on expectations of lower U.S. rates.

In oil markets, crude futures for December delivery slid 81 cents to $26.14 a barrel in New York on expectations that a revised U.S. resolution at the United Nations setting arms-inspection terms for Iraq will delay military action against that nation.


Among Tuesday’s highlights:

* The Dow got a lift from Procter & Gamble, up $2.24 to $88.74; Boeing, up $1.85 to $31.52; and Exxon Mobil, which added $1.32 to $35.58.

* In the tech sector, Microsoft rose 58 cents to $56.68, continuing its advance in the wake of a judge’s approval of an antitrust settlement that was largely in the software giant’s favor.

At the company’s annual meeting in Bellevue, Wash., Chief Financial Officer John Connors rejected suggestions that Microsoft should start paying cash dividends.


Because of continuing legal challenges despite the antitrust settlement, “The board has determined it would not be appropriate to commit to a long-term program like a dividend,” he said.

* Among other tech issues, Adobe Systems dropped $1.56 to $25.82 after Deutsche Bank Securities downgraded the shares to “sell” from “hold.”

* Amgen rallied $1.72 to $50.08. The company said Monday that one of its experimental drugs was found in a study to help dialysis patients.

* Broadway Financial, Los Angeles-based parent of Broadway Federal Bank, rose 30 cents to $17.30. The firm declared a 2-for-1 stock split.


Market Roundup, C7-8