Tech Stocks Push Higher but Blue Chips Struggle
Bargain hunting in the technology sector helped to drive Wall Street higher Thursday for a second straight session, though some blue chips struggled.
The tech-dominated Nasdaq composite index rose 9.59 points, or 0.5%, to 2,032.57, and many individual tech issues fared better than the index.
Stocks of small- and mid-sized firms also were in demand as investors looked for attractive names after recent profit taking had pushed prices lower.
A Standard & Poor’s index of 400 mid-sized stocks gained 5.02 points, or 0.8%, to 599.18, nearing the record closing high of 608.40 reached Feb. 17.
Blue chip stocks were less in demand Thursday. The S&P; 500 index edged up 1.24 points, or 0.1%, to 1,144.91.
The Dow Jones industrial average fell 21.48 points, or 0.2%, to 10,580.14, weighed down by declines in Boeing and United Technologies on concerns about a big military contract.
Though the Dow lost ground, rising stocks outnumbered declining issues by more than 3 to 2 on the New York Stock Exchange and on Nasdaq.
Share prices began a broad pullback Feb. 12, leading some analysts to warn that the market might be entering a full-fledged “correction” -- a decline of 10% to 15% in key indexes. None of the major indexes has suffered a decline of that magnitude since the market began to resurge a year ago.
But the selling in recent weeks was relatively muted. The Nasdaq index fell 6.9% from its 31-month high of 2,153.83 on Jan. 26 through Tuesday.
Over the last two days buyers seem to have taken control of the market again.
“We’re starting to see a mixed current of buyers and sellers,” said Steve Kolano, an equity trader at Boston Co. Asset Management. As stock valuations come more into line with investors’ expectations, “then you’ll see more long-term buyers.”
Some economic reports Thursday appeared weaker, but analysts said the numbers were better than they looked and pointed to an economy that still is gaining altitude.
Indeed, Treasury bond yields moved slightly higher, reacting to underlying strength in the economic data, analysts said. The benchmark 10-year T-note yield ended at 4.03%, up from 4.01% on Wednesday.
Among the day’s market highlights:
* Big gainers in the technology sector included InfoSpace, up $1.31 to $36.26; International Rectifier, up $1.60 to $45.88; and Adobe Systems, up $1.71 to $37.71.
* Many energy-related shares climbed further. Near-term oil futures in New York eased somewhat, but remained above $35 a barrel on continuing U.S. supply concerns. BP rose 29 cents to $49.03, Valero Energy jumped $1.27 to $59.02 and Oceaneering International gained 65 cents to $34.35.
* Shares of some home builders hit record highs, indicating that investors overall remain bullish on the housing sector. Pulte Homes rose $3.16 to $50.21, Centex surged $3.76 to $104.15 and Toll Bros. jumped $1.47 to $43.38.
* Stocks of many smaller California banks continued their recent hot streak, including Hanmi Financial, up $1.11 to $29.61, and First Republic, up 80 cents to $39.90.
* On the downside, Boeing fell $1.38 to $42.44 and United Technologies lost $2.42 to $89.88 after a Lehman Bros. analyst said a government contract for as many as 100 tanker planes would be delayed for at least 18 months. The Pentagon denied the report.
* Starbucks slid $1.54 to $37.41. The biggest U.S. coffee shop chain Wednesday said February sales at stores open at least a year rose 13%, but that the pace “is not sustainable.” The stock soared 63% last year.
* Darden Restaurants gained $1.26 to $23.40 after reporting improving sales trends at its Red Lobster chain.
