Market Wins One for the Gipper as Dow and Nasdaq Have Record Days
SAN FRANCISCO -- Displaying more Teflon than
"I went home last night thinking today would be one of the worst down days we've had in years," said Timothy Heekin, director of equity trading at Thomas Weisel Partners in San Francisco, an outlook shared by many. "A lot of people got the fake out."
Dow Jones Industrial Average continued its impressive comeback from
Meanwhile, the Nasdaq Composite Index, which had fallen nearly 10% in the prior three days, gained 155.49, or 4.2%, to 3882.62, its best-ever point increase. The S&P 500 rose 38.02, or 2.7%, to 1441.47.
Even StevenThe bulk of tech bellwethers rose on the session, leading the Nasdaq 100 up 5.7% and the Morgan Stanley High-Tech 35 higher by 3.7%. Dell (DELL) was a notable exception, falling 3.8% amid chatter it may produce lower-than-expected earnings. As tech stocks recovered, some of the recent enthusiasm for value names waned. Weyerhauser (WY), for example, declined 3.3% after Merrill Lynch cut its short-term rating to neutral from accumulate; the stock hit an all-time high yesterday. However, it was not an "either or" proposition today, further encouraging traders. The S&P Barra Growth Index rose 3.5% while the S&P Barra Value Index gained 1.9%. Previously out-of-favor names such as Coca-Cola (KO) and drug makers -- led by Bristol-Myers Squibb (BMY) -- improved noticeably. The American Stock Exchange Pharmaceutical Index rose 7.6%. Bucking convention, Thomas McManus, equity portfolio strategist at Banc of America Securities, said the broad-based strength was not surprising. The employment data was "not as strong a people were fearing" and after bond yields reversed their early rise, you could "chalk one up to the good guys," the bullish strategist said. As for the impressive breadth, McManus noted the "average stock is very attractively valued" after struggling in 1999 and 1998" while many made "little progress" since the summer of 1997. However, the strategist warned against overanalyzing the recent upswing by value stocks. "Nobody makes a big bet on underperforming groups in October," he said, suggesting there was "pent-up demand" for value stocks and "you've got to wait and see whether the fundamental backdrop will validate those trades." Given his expectations for the economy to slow and bond yields to decline in 2000, McManus said he is "wary" about the prospects for basic material stocks. However, he foresees continued gains for consumer staples, financials, drug stocks and utilities among formerly out-of-favor groups. Among other indices, Dow Jones Transportation Average gained 27.64, or 0.9%, to 2964.72 and the American Stock Exchange Composite Index climbed 6.00, or 0.7%, to 863.76. For the week, the Dow rose 0.2%, the S&P shed 1.9%, the Nasdaq declined 4.6%, the Russell shed 3.3%, the DOT fell 6%, the TSC New Tech 30 fell 3.7%, the Dow transports slid 0.4%, the Dow utilities jumped 5.1% and the Amex Composite fell 1.5%. Elsewhere in North American equities, the Toronto Stock Exchange 300 shot up 315.8, or 3.9%, to 8429 and the Mexican Stock Exchange IPC Index jumped 294.44, or 4.4%, to 7047.09.
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