The race for 6000 begins.
Nasdaq Composite Index
rode an afternoon explosion for its first-ever close above 5000, led by large-cap names in general and semiconductor and Internet issues in particular. But the Nasdaq wasn't alone, as the
Dow Jones Industrial Average
-- or, better, a handful of its components -- was swept up in the late surge, and finished above 10,000 for the first time in four days.
The Comp finished with a gain of 149.60, or 3.1%, at 5046.86. It was the fifth-largest point increase since trading began in 1971, but far less significant on a percentage basis. For the year, the Comp is up 24%.
"This is pure retirement fund inflows being put to work," said Scott Bleier, chief investment strategist at
. "It's nothing fundamental: there are no analyst comments that lit a fire under a group, there was no magic technology introduced today ... it's about getting into the 50 stocks that are really the key."
Keys like the big-cap Nasdaq bellwethers.
was the most active, gaining 7.5% on 70 million shares traded;
rose 4.6%, and
Semiconductors were stronger, including
, up 14%, and
Advanced Micro Devices
, up 6.8% on the day.
Internet stocks were a beast also.
jumped 14%, and
New York Stock Exchange's
most active, was up 6 1/8, or 11%, to 61 on 32 million shares.
TheStreet.com Internet Sector
index rose 45.21, or 3.5%, to close at a record 1333.22. The
also closed at an all-time high, ending the day up 11.37, or 1.9%, to a record 606.05.
"People are shoehorning themselves in, price be damned," said Bleier.
soared today, two days after their merger announcement. Network Solutions gained 71 1/16, or 16.7%, to 494 1/2. VeriSign gained 37 3/4, or 18.6%, to 240 3/4.
The performance of the Nasdaq and the NYSE today illustrates a somewhat perverse division. The Nasdaq rose on positive if not stellar breadth, with most sectors higher save for the biotech stocks. Breadth on the NYSE was uglier, and strong performances were linked more to individual stocks, rather than sectors, save for the drug stocks.
"It's going to be difficult for the Dow to make new all-time highs, simply because of rising interest rates, and narrow breadth is going to have an effect there," said Courtney Smith, president and chief investment officer of
Courtney Smith & Co.
"The Nasdaq, meanwhile, is much broader than the broad market. The new economy hasn't been affected by interest rates -- that's not to say it won't be in the future, but it hasn't yet."
The Dow gained 154.20, or 1.6%, to 10,010.73. Of that, 54.6 points of the gain was attributable to
, which ended up 11, or 7.8%, at an all-time closing high of 151 7/8. The S&P finished strong, ending the day up 34.99, or 2.6%, to 1401.69.
Investors continued to pile into the drug stocks, which have rebounded in the last couple days on positive comments from analysts.
rose 7.6% today,
gained 14.1%, and
rose 5.4% in trading today.
Rotation Not Moving Smoothly
Good old-fashioned rotation? Hardly. Investors dug the drugs, but other sectors, such as chemicals and capital goods, aren't benefiting from that enthusiasm. The bulk of the Dow's gains can be attributed to three stocks: Hewlett-Packard, Merck and Microsoft, with many others just a few ticks higher.
, down 2.7%,
, down 2.4%, and
, off by 2%, all suffered today.
Much of that stems from oil prices. Despite
assurance that a production increase will be engineered, the cost-savings benefit of oil at $13 a barrel back in 1998 and early 1999 -- is no longer. The
Producer Price Index
shows a 18% increase in crude, or unfinished goods from 12 months ago. Even when production is increased, it's not likely to provide relief for companies' production costs or for gasoline prices until late in the summer, if that.
"Investors are saying there's potentially a lot more land mines, and they're not thinking. They're walking with their feet and just selling, and going into tech," said Allan Meyers, portfolio manager of the
Kent Funds Growth & Income
The market was dogged by rumors during the day that Cisco was going to be added to the Dow Jones Industrial Average. Dow Jones officials refused to comment, but is the day far off?
"People are going to keep buying one or two subsets of the Nasdaq until it ends one day, when the whole world owns Nasdaq or nothing else," said Larry Rice, chief investment officer at
. "It'll be nothing but technology indexes; and then there's going to be no more buyers for the group -- and then what happens?"
Breadth was mixed on heavy volume.
New York Stock Exchange: 1,689 advancers, 1,267 decliners, 1.127 billion shares. 64 new 52-week highs, 163 new lows.
Nasdaq Stock Market: 2,471 advancers, 1,820 decliners, 1.98 billion shares. 296 new highs, 118 new lows.
For a look at today's top stocks in the news, see the Company Report, published separately.