Tech Stocks Snap Losing Streak
Technology stocks rose Monday, snapping a six-session losing streak after they got a boost from bullish brokerage calls on software makers Oracle and Adobe Systems.
But Treasury bond yields jumped again in advance of today’s Federal Reserve meeting.
3M helped pull the blue-chip Dow Jones industrials into positive territory after the maker of Post-It notes and fiber optic connectors announced a 2-for-1 stock split.
The Dow added 26.26 points, or 0.3%, to end at 9,217.35.
The broader Standard & Poor’s 500 index rose 3 points, or 0.3%, to 980.59.
The tech-heavy Nasdaq composite index jumped 17.48 points, or 1.1%, to 1,661.51, after losing a total of 5.2% over the previous six sessions.
Winners led losers by 2 to 1 on Nasdaq and by 5 to 3 on the New York Stock Exchange. Trading was very light -- typical of a Monday session in August.
Investors shied away from making big moves before today’s meeting of the Federal Reserve’s Open Market Committee, which is expected to keep short-term interest rates at current 45-year lows to spur economic growth.
More important, “People will wait to see what the Fed says about what the future holds, with the expectation that it’s not going to raise rates anytime soon,” said Michael Palazzi, managing director of equity trading at SG Cowen Securities.
Still, Treasury yields rose as bond investors feared positive words on the economy from the Fed could deal another blow to a battered government debt market. The yield on the benchmark 10-year T-note climbed to 4.35% from Friday’s close of 4.27%.
The two-year T-note rose to 1.76% from 1.70% on Friday.
Further clues on the health of the economy will come later this week, when Wall Street gets hit with a blitz of data. Reports on inflation, retail sales and consumer confidence are scheduled for release.
In other trading Monday, the dollar was lower against the euro and the yen, reaching a three-week low in New York trading of 118.70 yen. It fell further early today in Tokyo after the Japanese government said the economy grew at a 2.3% annualized rate in the second quarter, which was faster than expected.
Among Monday’s highlights:
* Oracle gained 39 cents to $11.68 and ranked as the most active stock on Nasdaq. Merrill Lynch upgraded the business software maker to “buy” from “neutral.”
Adobe climbed $1.48 to $33.26 after US Bancorp Piper Jaffray raised its rating on the Web publishing software maker to “strong buy” from “outperform.”
The Goldman Sachs software stock index jumped 1.8%.
* Also in the tech sector, semiconductor stocks bounced back. They had tumbled Friday after chip maker Nvidia warned of a sales shortfall this quarter.
Nvidia rebounded 84 cents to $16.34, Broadcom gained 70 cents to $20.94 and Altera rose 68 cents to $18.85.
* 3M ended the day up $1.95 at $141.90, a record high. It is the highest-priced stock in the Dow index. The 2-for-1 split would be effective Sept. 29.
* Berkshire Hathaway’s Class A shares added $2,400 to $74,800. Barron’s magazine said the stock might be undervalued.
* Midas fell 10% after the operator of auto-service shops said it swung to a second-quarter loss, including charges tied to its exit from the wholesale auto parts distribution business. Midas fell $1.35 to $11.90.
* Some heavy-industry stocks continued to climb on optimism about the economy. International Paper gained 52 cents to $39.49 and Potash jumped $1.28 to $65.81.
* The falling dollar helped to boost gold to its biggest gain in more than two weeks. Gold futures for December rose $5.40 to $361.70 an ounce in New York.
Shares of mining companies followed the metal higher. The Amex “gold bugs” index of mining stocks rose 1.7% to its highest level since February 1997.
