Dow Gets Close to 10,000 Mark as Stocks Advance
The Dow Jones industrial average made a strong run for the 10,000 mark Monday but fell a few dozen points short.
In currency trading, the dollar continued to sink to multi-year lows against the euro and other major currencies.
The stock market had a generally bullish tone awaiting Federal Reserve policymakers’ meeting today. The central bank is expected to keep its benchmark short-term interest rate at 1% to give the economy more time to gain momentum.
But some investors have been nervous in recent weeks that the Fed might use its post-meeting statement to give more clues about whether it might begin to tighten credit in 2004.
Stocks shook off those concerns Monday, as the Dow jumped 102.59 points, or 1%, to 9,965.27. The index rose as high as 9,970 late in the day, then pulled back.
The Dow led the rally overall, while smaller stocks fared less well. That’s a change from much of this year, as bigger stocks have mostly lagged smaller issues.
The Russell 2,000 index of smaller stocks rose 4.03 points, or 0.8%, to 543.04. Last week it fell 1.4% while the Dow rose 0.8%.
Among other indexes Monday, the Nasdaq composite gained 11.03 points, or 0.6%, to 1,948.85.
Year to date, the Russell index is up 42%, Nasdaq is up 46% and the Dow is up 19.5%.
In another sign of a shift to bigger names, rising stocks outnumbered losers by 2 to 1 on the New York Stock Exchange on Monday. By contrast, winners had only a narrow edge on Nasdaq.
Many money managers have been predicting that blue-chip shares would begin to catch up to smaller stocks, as more investors look around for issues that are more reasonably priced relative to earnings.
Some analysts say the market rally could get the attention of more potential investors if the Dow can close above the 10,000 mark. The last time the index traded above 10,000 was May 31, 2002, when share prices were on their way down amid a rash of corporate accounting scandals.
Investors will focus today on the Fed’s language. In the last several meetings, the central bank has said it wouldn’t likely raise rates for a “considerable period.”
“Debate is swirling on the wording in their statement and whether they drop the ‘considerable period’ terminology,” said John Caldwell, chief equity strategist for McDonald Financial Group. “Any movement down that path might spook the market.”
The bond market was relatively calm Monday ahead of the Fed meeting. Long-term Treasury yields ended slightly higher.
In currency trading, the dollar’s renewed decline suggested that many foreign investors don’t believe the Fed will raise interest rates anytime soon. Higher rates could support the dollar.
The buck slid to a record low of $1.223 against the euro, compared with $1.217 on Friday. It fell to its lowest level in a decade against the British pound.
Among Monday’s highlights:
* The Dow was led by Boeing, up $1.12 to $39.12; GM, up $1.09 to $47.14; and 3M, up $1.21 to $81.95.
Among other heavy-industry issues, mining firm Inco gained $1.42 to $36.89 and Vulcan Materials jumped $1.67 to $47.47.
* Energy stocks climbed with oil and natural gas prices. Exxon Mobil rose 62 cents to $37.40, Total gained $1.01 to $84.22 and ChevronTexaco added 61 cents to $78.61.
* Banking stocks were strong. Bank of America rose 89 cents to $76 and Golden West Financial rallied $2.26 to $101.55.
* Retailers were weak overall on concerns about holiday shopping. Kohl’s lost $1.14 to $46.21 and Kmart slid $2.04 to $27.36.
* Avon Products dropped $5.40 to $62.67. The world’s largest direct seller of cosmetics said fourth-quarter U.S. sales will miss its forecast because some holiday orders can’t be filled.
* CV Therapeutics plummeted $4.55 to $12.21. The biopharmaceutical company must conduct more research to win U.S. approval of its Ranexa heart drug, which would be its first product on the market, regulators said in a report.
Market Roundup, C9-10
