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
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
, 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
hopped 127.33, or 3.2%, to 4125.30.
Biotech was the big mover again today. The
Nasdaq Biotechnology Index
Nasdaq Telecommunications Index
rose 2.9%, while the
American Stock Exchange Networking Index
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.
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
was pummeled, falling 3 13/16, or 7.2%, to 48 15/16. The
S&P Retail Index
The S&P 500 gained 0.58 to 1388.25.
Internet stocks gained.
TheStreet.com Internet Sector
index added 17.98, or 1.6%, to 1144.49.
TheStreet.com 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
Banks, which have struggled overall lately despite perking up earlier this week, stumbled. The
Philadelphia Stock Exchange/KBW Bank Index
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
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.
For coverage of today's top stocks in the news, see the Company Report, published separately