Blue-chip stocks bumbled and stumbled, but gains among smaller stocks helped propel the
Nasdaq Composite Index
to a record close.
Internet stocks--and Internet kibbutzing--helped drive the technology-studded Nasdaq to a gain of 7.20 to 1299.81. Economically sensitive stocks outperformed stable growth names as investors made another bet that the economic cycle would extend through 1997. But all that shifting failed to nudge the
Dow Jones Industrial Average
, which finished unchanged at 6521.70. The
shed a nominal 0.79 to 756.53.
Among network and Internet software firms,
(NSCP:Nasdaq) rose 2 1/8 to 58,
(IFMX:Nasdaq) jumped 2 5/8 to 26 3/8 and
(AOL:NYSE) rose 4 + to 40. America Online also benefited from a strong recommendation from
Internet hardware firms also performed strongly.
(USRX:Nasdaq), with excitement about its new, faster modems gaining steam, added 2 + to 80 7/8. Among networking equipment firms,
(CSCC:Nasdaq) tacked on 5 + to 74 5/16 and
(COMS:Nasdaq) jumped 3 1/8 to 78 +.
Semiconductors enjoyed the best performances, even as bellwether
(INTC:Nasdaq) rose a scant + to 127 1/8.
(MU:NYSE) climbed 2 5/8 to 35 +,
(ATML:Nasdaq) climbed 2 3/8 to 35 3/8,
(LSI:NYSE) added 2 + to 32 5/8,
(TXN:NYSE) gained 2 to 65 + and the
Philadelphia Semiconductor Index
jumped a whopping 7.03 to 244.97.
One trader said investors have moved swiftly into smaller names after the extended holiday weekend. Part of the move stems from a desire to broaden a rally that has clung close to safer blue-chip names in the past few weeks.
Another aspect: The small-cap move could reflect an early bid to capitalize on the so-called January effect. The January effect posits that small caps outperform the market in January, primarily because they are excessively discarded for tax purposes in November and December. In recent years, the effect has hit the market earlier than January and its impact has been muted. With returns high--and tax liabilities steep--some traders believe the January effect could return in force this year.
With Christmas spirits soaring--at least at the cash register--retailers gained ground.
(S:NYSE) added 1 + to 51 + and
(DH:NYSE) rose + to 39 5/8.
But not all big companies suffered.
(IBM:NYSE), old blue itself, gained 3 7/8 to a record 163 + after
joined the parade of Wall Street firms once again backing the stock.
(DEC:NYSE) surged 3 3/8 to 40 after
upped its investment rating on the stock. Among other computer hardware concerns:
(DELL:Nasdaq) rose 3 + to 104 7/8,
(GATE:Nasdaq) added 1 + to 55 3/8 and
(CPQ:NYSE) added 1 1/8 to 80 3/8. Traders see the computer firms benefiting from a strong Christmas sales season.
(IOM:NYSE) climbed 2 3/8 to 25. On Monday, an Internet site (www.techweb.com) posted an excerpt from a newsletter that plugged the disk-drive maker. Arguing that Iomega's business arrangement with Gateway will force Dell to also strike a deal with Iomega, the newsletter excerpt strongly recommended Iomega's shares.
Sufferers included the pharmaceutical group, which tends to underperform when more economically sensitive issues catch fire.
(LLY:NYSE) dropped 1 7/8 to 74 5/8, and
(PFE:NYSE) lost 1 5/8 to 88. Also skidding:
(BA:NYSE), down 1 7/8 to 97 + and
(OAT:NYSE), off 1 5/8 to 37 +.
By Dave Kansas