Nasdaq Climbs Again; Blue Chips End Mixed
The technology-laden Nasdaq rose for the fourth straight session to its highest close in 2 1/2 years Wednesday, aided by a bullish brokerage call on chip heavyweight Intel.
Blue-chip stocks ended mixed, however, as investors took a cautious stance before releases expected later this week of key earnings and economic data.
In other markets, the dollar rallied modestly against the euro. Gold and bond yields eased.
The Nasdaq composite index jumped 20.31 points, or 1%, to 2,077.68, its highest close since Aug. 2, 2001.
The Dow Jones industrial average slipped 9.63 points, or 0.1%, to 10,529.03. But the broader Standard & Poor’s 500 index rose 2.66 points, or 0.2%, to 1,126.33.
Weakness in big oil and gas companies’ stocks weighed on the broader market, as some investors sold shares to lock in recent gains amid concerns that energy prices could start to retreat from current high levels. The S&P; integrated oil and gas companies index fell 0.8%.
Shares of oil giant BP slumped $1.20 to $49.02.
Despite the Dow’s loss, winners led losers by 3 to 2 on Nasdaq and by 6 to 5 on the New York Stock Exchange. Trading was heavy.
Wall Street’s rally of recent months shows it’s highly confident about the economy’s resurgence and improved corporate profits this year. But some analysts have begun voicing concerns that stock prices are close to being fully valued after last year’s steep rally.
Aluminum maker and Dow component Alcoa will announce its fourth-quarter results today, while on the economic front, investors will get a report on weekly initial jobless claims, followed by nonfarm payroll data for December on Friday.
“A lot of people are positioning themselves for the upcoming year, and technology appears to be in favor, judging by the Nasdaq’s performance,” said Joe Kalinowski, research director at Puglisi & Co., an institutional research and trading firm.
“We started off the year with a very strong rally, and it’s natural for a bit of a pullback now,” Kalinowski said. “I’m still encouraged by the strength the market’s showing, since I think it’s setting us up for a very strong earnings season.”
Intel, the world’s largest maker of computer chips, jumped $1.09, or 3.3%, to $33.99. It was the blue-chip Dow’s biggest percentage gainer and was among the most active Nasdaq issues. Bernstein Research raised its investment rating on the tech bellwether to “outperform” from “market perform.”
In currency trading, traders took a break from bashing the dollar. The euro slipped to $1.265 from $1.277 Tuesday.
In the bond market, Treasury yields fell after the government saw surprisingly strong demand at its auction of $16 billion in five-year notes. The yield on the notes was 3.26%.
In other highlights:
* Nortel Networks topped the NYSE’s most-active list, gaining 92 cents, or 19%, to $5.68. The company struck a deal to supply Verizon Communications, the No. 1 U.S. phone company, with next-generation Voice Over Internet Protocol, or VoIP, technology. Nortel’s stock also got a boost after UBS Investment Research upgraded its rating on the company.
* Circuit City Stores shares fell sharply after the retailer reported that its December same-store sales fell from last year, disappointing investors who hoped to see its massive store remodeling effort pay off. Shares of Circuit City, the No. 2 U.S. electronics chain, fell $1.18, or 12%, to $8.92. The firm attributed the sales decline to weak demand for video games and stereos.
