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Updated from 4:05 p.m. ET

At the beginning of first-quarter reporting season, investors were acting like the worst was over. The bulls were in full control of momentum, and the

Dow Jones Industrial Average

closed above the critical 10K benchmark. The tech-heavy

Nasdaq Composite Index powered ahead to close at 1852, and the broader

S&P 500 added 31 to finish at 1168.

"People are relieved that preannouncement season is over," said Todd Clark, head of listed trading at

W.R. Hambrecht

. "The belief is that, perhaps, we've seen the worst." Without the backdrop of preannouncements, investors might be feeling that the market can perform better."

Behind the gains on the major U.S. stock market indices was good news overseas. After British telecom-equipment maker



didn't issue an earnings warning, as it had been expected, telecom stocks rallied, lifting the major European indices.

After the close of regular trading today,



kicks off the parade of tech earnings announcements. A lot of attention has been focused on Motorola after concerns about a liquidity crisis -- which the company denied -- surfaced last week. The first of the three major mobile-phone makers to report, Motorola has already lowered its estimates for the quarter two times.

Jim Volk, co-director of institutional trading at

D.A. Davidson

, offered four reasons for the strength of today's gains: "Europe is strong, investors are hoping that first-quarter earnings conference calls will be good, the market is oversold, and it's Easter week," he said.

On the heels of Marconi's news -- or lack of news -- U.S. telecom stocks were ringing off the hook. Before the close, shares of Motorola boosted 12.1% to $12.89,



gained 5.4% to $25.47, and



lifted 7.8% to $6.08.

Other tech stocks were bouncing as well:



before the closing bell soared 6.1% to $24.62,



rocketed 11.3% to $16.12,

Juniper Networks


gained 23.2% to $40.88, and

JDS Uniphase


lifted 14.3% to $17.46.

Other traders attributed the force of today's rally to general market conditions. "Lately, people have disregarded any positive news, because they didn't want to get burnt," said Rob Cohen, co-head of listed trading at

Credit Suisse First Boston

. "There is so much pent-up buying power."

To be sure, there's still plenty of negativity out there about the earnings outlook. Last night, wireless communications company



reported a 26% drop in revenue and forecast a 15% to 20% drop in 2001 revenue. But in the face of the news, the stock was bouncing 13.6% in afternoon trading. And today

Cypress Semiconductor


said that first quarter revenue and profits would fall short of expectations. Despite the forecast, the chip stock added 6.1% to $16.34.

In very quiet trading yesterday, stocks moved higher. After


raised its first-quarter performance targets yesterday and PC maker



confirmed its first-quarter earnings targets last week, some have begun to think that the earnings disaster could be ending soon. Amazon was up 7.4% to $12.01; Dell rose 5.5% to $26.26.

Along with optimism about earnings, rumors that the

Federal Reserve could

cut interest-rates -- as soon as this week -- have been circling on trading floors. The chatter began last Friday, with the release of a weak employment report. Some market experts are worried that investors will get their hopes up about a rate cut and then sell stocks if they don't get one. Among Wall Street experts, the consensus is that the economy is not weak enough for the Fed to act early.

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The major European indices turned higher as they approached midsession, lifted by the telecoms. The

FTSE 100

closed up 139.7, or 2.47%, to 5803. Across the channel, the Paris


gained 148, or 2.9%, to 5331. Frankfurt's

Xetra Dax

-- still trading -- was gaining 131.1 points, or 2.3%, to put the index at 5912.

The euro was lately trading at $0.8954.

Asian markets were mixed overnight. Japanese investors sold stocks for a second day amid continuing disappointment over a government economic aid package. Tokyo's

Nikkei 225

fell 221.5, or 1.7%, to close at 12,620.3. Hong Kong's stock market managed to scratch out an unimpressive gain, however, closing up 11.6 to 12213.7.

The dollar was trading at 124.6 yen.

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