SAN FRANCISCO -- The old economy strikes back -- with a vengeance.
Blue-chip stocks rose steadily and sharply today as investors scrambled for the relative safety of value stocks amid an ongoing selloff in tech names. A mad rush into staid, old blue-chips seemed -- at times -- reminiscent of past gains by the
Nasdaq Composite Index
, which suffered its third-consecutive triple-digit decline.
Dow Jones Industrial Average
climbed 320.17, or 3.3%, to 10,131.41, notching the fourth-largest point gain in its long history. The percentage rise was not similarly significant.
The venerable index was led by a wide selection of its constituents, including
Johnson & Johnson
Of the Dow's 30 components, only
ended in arrears.
rose 33.01, or 2.4%, to 1392.16 behind strong gains in financial, consumer, utility, transportation and cyclical stocks. Notably, the
Dow Jones Transportation Average
gained 139.94, or 5.9%, to 2521.71 and the
Dow Jones Utility Average
climbed 9.90, or 3.6%, to 284.02; both averages have been down significantly in recent months.
"It's a great rally and well needed to boost confidence," said one listed trader. "At these levels, there's a lot of bargains. You've got to buy 'em."
The Dow's ability to reclaim 10,000 could signal a bottom for that average, the trader said. But he quickly noted follow-through will be key, especially with the
Producer Price Index
for February due tomorrow, followed by the
Consumer Price Index
Those potential obstacles were relegated to afterthoughts today, however.
rose 2.2% and
gained 1.5% after posting better-than-expected earnings
last night. But those bellwethers could not rescue the Nasdaq, which closed down 123.95, or 2.6%, to 4582.68 after trading as low as 4568.67. The
At its nadir, the Comp was 9.5% below its all-time closing high of 5048.62 and finished the session 9.2% below that
March 10 close.
The Comp continues to be hampered by weakness in recent big gainers such as
, which fell 24.4% after announcing
plans to acquire
for $3.2 billion in stock.
Other recent high-flyers suffering reversals included
, which slid 8.7% despite announcing a 3-for-1 stock split.
Additionally, chip and equipment makers such as
retreated from their recent big advance. The
Philadelphia Stock Exchange Semiconductor Index
Internet favorites also stumbled, including
despite rumors of an alliance between the firms.
TheStreet.com Internet Sector
index fell 77.93 or 6.1%, to 1195.50.
Meanwhile, biotech stocks stabilized after yesterday's
gained 13.3% after
Credit Suisse First Boston
upped its recommendation to strong buy from buy.
rose 4.2% after receiving a patent for technology that corrects certain gene abnormalities.
was also on the rebound, although other biotech names continued to fall.
fell 12.3% despite positive comments from
Deutsche Banc Alex. Brown
American Stock Exchange Biotech Index
A Head-Shaking Day
"This is a market that is repairing itself with such skill and precision, it's incredible," said Scott Bleier, chief investment strategist at
. "It's working off the unusual excess that has occurred between the tech and biotech and real world companies. Everything is doing good except the things that got out of control."
Indeed, big gains were registered by sector gauges, including the
S&P Chemical Index
, up 8.1%; the
American Stock Exchange Pharmaceutical Index
, higher by 7.4%; the
Morgan Stanley Consumer Index
, up 6.7%; the
Philadelphia Stock Exchange/KBW Bank Index
leapt 7.5% and the
Amex Airline Index
jumped 8.2%. In other words, all the stuff that hasn't been working for much of this year.
Bleier attributed today's "ballistic" blue-chip advance to a growing sense the
will not raise rates beyond its next two meetings.
Bruce Bittles, market strategist at
in Nashville, observed last week's decline in
Procter & Gamble
may have been the "last straw" that sent most blue-chip stocks into "oversold territory." Thus, they were primed for today's remarkable advance.
"I think a lot of the action is related to expiration," Bittles added, referring to this Friday's triple-witching expiration of stock options and futures, and index futures. "I think a lot of this is the closing out of March programs but there's no way to document that."
Meanwhile, despite the bloodletting in the past three days in so-called momentum favorites, Bleier argued there hasn't been enough pain or fear to suggest that game has ended.
"You get these little rolling corrections without anybody getting real scared" and then the Nasdaq favorites rebound sharply, he said. "I think that's what's going to happen again. You get a little correction and people start calling for the end of the world. But there hasn't really been any fear. All there is is money that has to be put to work and a serious desire to own" tech stocks.
Among other indices, the
fell 14.12, or 2.5%, to 558.87 while the
American Stock Exchange Composite Index
fell 19.39, or 1.9%, to 996.12.
New York Stock Exchange
trading, 1.3 million shares were exchanged while advancing stocks led declining issues 1,914 to 1,122. In
Nasdaq Stock Market
action 1.9 billion shares traded while losers led 2,739 to 1,544. New 52-week lows bested new highs 130 to 26 on the Big Board and by 164 to 52 in over-the-counter trading.
The price of the 10-year Treasury note rose 2/32 to 101 17/32, its yield dipping to 6.29%.
Market data above are preliminary. For coverage of today's top stocks in the news, see the Company Report, published separately