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Nasdaq Ends Deep in the Green; Dow Is Green With Envy

Both the Comp and the Russell 2000 set new records.

The stock market usually doesn't like change and it sure didn't change today, even with Fed Chairman Alan Greenspan'sHumphrey-Hawkins testimony, which some sectors at least shrugged off.

Despite what some said was tough talk out of the Fed chief on interest rates, money continued to chase the biotech sector, tech and telecommunications stocks, helping push the

Nasdaq Composite Index


Russell 2000

sharply higher. Both gauges closed at all-time highs.

Meanwhile, losses in financial, basic material, energy and retail stocks helped sink the

Dow Jones Industrial Average

and keep a lid on the

S&P 500

, both of which could only look at the Comp and small-cap Russell 2000 with envy.

Powered by the continued orgy of buying in the biotech sector, along with strong interest in computer makers, telecom and networking stocks, the Comp skyrocketed 121.25, or 2.7%, to 4548.90. it was the Comp's sixth-largest point gain ever. Volume on the Nasdaq was 2.002 billion, a new record. The

Nasdaq 100

hopped 127.33, or 3.2%, to 4125.30.

Biotech was the big mover again today. The

Nasdaq Biotechnology Index

TheStreet Recommends

soared 9.5%.


Nasdaq Telecommunications Index

rose 2.9%, while the

American Stock Exchange Networking Index

jumped 1.8%.

Elsewhere among the winners, the small-cap Russell 2000 surged 10.66, or 2%, to 558.42.

"We still love the small-cap stocks here," said Mike Hurley, technical analyst with the online investment bank


. The technician pointed out that the Russell 2000's relative strength vs. the S&P 500 has been very good and that "we're seeing a real sea change" in investor sentiment in favor of small-caps.

As for the Dow, it fell 46.84, or 0.4%, to 10,514.57.

American Express

(AXP) - Get American Express Company Report

was the biggest drag on the blue-chip gauge, falling 5 29/32 to 147 15/16. Reflecting the continued woes for retailers, Dow component


(WMT) - Get Walmart Inc. Report

was pummeled, falling 3 13/16, or 7.2%, to 48 15/16. The

S&P Retail Index

slumped 5%.

The S&P 500 gained 0.58 to 1388.25.

Internet stocks gained. Internet Sector

index added 17.98, or 1.6%, to 1144.49. New Tech 30

rose 21.64, or 3.1%, to 730.48. The TSC New Tech 30, unveiled Jan. 5, is a market-cap-weighted index focused on tracking the most scorching part of the market, the magnet for Wall Street's hot money. A list of the index components is available at

Meanwhile in the Treasury market, the 10-year note was down 5/32 to 99 17/32, yielding 6.57%. The 30-year Treasury bond surged. It was up 17/32 to 100 11/32, putting its yield at 6.22%. (For more on the fixed-income market, see today's Bond

Focus .)

Banks, which have struggled overall lately despite perking up earlier this week, stumbled. The

Philadelphia Stock Exchange/KBW Bank Index

slumped 2.2%.

A couple areas of the market that haven't done well lately -- which have been market leaders in the past -- are the financials and drug stocks, said Hurley. He noted that he'd like to see those groups hold their lows, which they're approaching.

"It's important to see them hold," he said.

Hurley said he'd like to see 330 on the

American Stock Exchange Pharmaceutical Index

hold, while for the

NYSE Financial Index

he'd like to see about 460.

Today the Amex pharmaceutical index fell 2.59 to 337.12, while the financial index tumbled 6.03 to 463.68.

Fed Chiefs Say the Darndest Things

Chris Rupkey, senior financial economist at

Bank of Toyko-Mitsubishi

, characterized Greenspan's speech as "unremittingly bearish" and called his language "tough."

"It wasn't pleasant, let's put it that way," he said.

Rupkey said the Fed has "a lot more work to do," as far as raising interest rates. He's looking for the fed funds rate to be at 6.5% at year-end. Fed funds rate are currently at 5.75%.

In his appearance, the G-Man pointed out that "to date, interest-sensitive spending has remained robust, and the



Federal Open Market Committee

) will have to stay alert for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply, even should the acceleration of productivity continue."

The above quote was one of the items in the chairman's appearance that alarmed Rupkey.

"It just sounds like" the Fed has a lot more "heavy lifting" to do as far as rates go, Rupkey said.

The ironic thing, said Rupkey, is that the economy is in a condition where the core CPI is the lowest it's been in ten years, but the Fed appears to be ready to hike rates dramatically.

As for inflation data, stock traders out of the gate were heartened by some market-friendly wholesale inflation numbers. The

Labor Department

said the overall

Producer Price Index

for January was unchanged, while excluding food and energy prices, the so-called core PPI, fell 0.2%. Economists polled by


expected overall PPI to rise 0.2%, while the core was projected to rise 0.1%. Looking ahead, tomorrow, the

Consumer Price Index

will be released.


New York Stock Exchange

trading, 1.035 billion shares were exchanged while declining stocks beat advancers 1,558 to 1,443. In Nasdaq action 2.002 billion shares traded while winners defeated losers 2,335 to 1,880. New 52-week lows beat new highs 174 to 72 on the NYSE while new highs beat new lows 387 to 99 in over-the-counter trading.

Among other indices, the

Dow Jones Utility Average

slipped 2.12, or 0.7%, to 303.99; the

Dow Jones Transportation Average

advanced 15.57, or 0.6%, to 2470.36; and the

American Stock Exchange Composite Index

rose 35.21, or 3.9%, to 937.46.

Thursday's Most-Actives

For coverage of today's top stocks in the news, see the Company Report, published separately