Stocks chugged steadily higher throughout the quiet trading session, easily shrugging off negative financial news. Still, by the end of the session, some of that I think I can confidence had worn off.
Overall, those long had little to complain about today. The
Dow Jones Industrial Average
gained 77.87, or 0.7%, to 10,811.78 after falling off its intraday high of more than 170 points which it reached around 3 p.m. EDT. The story was similar in the
Nasdaq Composite Index
which ended the day up 97.42, or 2.5%, to 3958.08 after jumping as much as 120 points. The
rose 12.68, or 2.5%, to 518.93 while the
lifted 15.82, or 1.1%, to 1468.25.
The Dow is having a nice bounce after being oversold last week," said Brian Belski, chief investment strategist at
George K. Baum
in Kansas City, Mo. "Overall it certainly looks as though we're beginning to levitate steadily into higher-growth areas," he said, pointing to tech and telecom. In addition, investors are starting to pay closer attention to some of the first quarter's top performers, including
Tony Cecin, manager of Nasdaq trading at
U.S. Bancorp Piper Jaffray
, feels the same about the tech sector. "It's just kind of quietly nice," he said, noting that the Nasdaq's volume was steadily working its way up near 1.5 billion shares. "The Nasdaq certainly feels like it's got its feet back under it again."
Volume was lighter than usual for most of the day as a result of closed markets overseas. Most of Europe was closed due to May Day, while Japanese financial markets will be closed for the later half of the week due to Golden Week. (See Market Internals below.)
Performance was all the more impressive considering some of the early morning news that hung over the market. The
National Association of Purchasing Management reported that its monthly manufacturing index rose in April, its 15th consecutive month of growth, though at a slightly slower-than-expected rate. Separately, the
construction spending rose 1.4% during March, well above the average forecast of a 0.2% rise. Both of those indicators could have spelled trouble for stocks if investors became spooked about inflation again, but the numbers didn't seem to have much of an impact.
The numbers got "washed away with the overall trend, but at the same there is a certain amount of ambiguity about inflation rates that will hold people back a step," said Belski. The indices are "not going to be as momentous on the upside," he said.
In the ongoing
antitrust case, news of a government proposal to break the company in two, was largely viewed as discounted today, paving the way for the technology stocks and the Nasdaq Composite to move higher. Microsoft gained 3 11/16, or 5.3%, to 73 7/16.
The optimistic attitude also spread to Old Economy stocks, as the Dow moved higher too, boosted by financials including
which ended the day in the green, though off the intraday highs. The
American Stock Exchange Broker/Dealer Index
rose 2.6% and the
Philadelphia Stock Exchange/KBW Bank Index
ended up 1.7%.
Tech stocks of all types shared in the strength today. Biotechs enjoyed a bounce with the
Nasdaq Biotechnology Index
gained 5.9% and
moved up 0.7%.
Internet stocks were strong despite a couple of gaps, as
TheStreet.com Internet Sector
index surged 24.31, or 2.7%, to 919.42.
was up 8.6%.
slipped 3/8 to 59 5/8 after it announced a marketing alliance with
. Homestore.com was much happier, gaining 25.3%.
Breadth was positive on moderately heavy volume.
New York Stock Exchange:
1,955 advancers, 1,042 decliners, 952.6 million shares. 76 new 52-week highs, 31 new lows.
Nasdaq Stock Market:
2,575 advancers, 1,576 decliners, 1.474 billion shares. 53 new highs, 62 new lows.
For a look at stocks in the news, see the Company Report, published separately.