Wall Street investors were taking care of business today after an inflation-free
report sent stocks in every sector soaring across the board.
According to the
, productivity grew 5% during the fourth quarter, edging out the analysts' prediction of 4.2 annual percentage rate. The fourth-quarter report was the strongest in seven years. Unit labor costs also upset the insiders' prophecy of a 0.8% increase, and actually fell 1%.
Today's numbers indicated that productivity is continuing to climb without rising costs, thus dispelling worries of inflation. The report eased investors' fears that the
would over take interest rates to an even higher than expected level in order to curb inflation. So how did the market fare?
"It looks like we had a broad-based, strong day," said Jeffrey Warantz, equity strategist at
Salomon Smith Barney
. "We're not seeing any one sector standing out. We may have a slight tilt toward growth-type stocks and maybe some losses in selected issues
, but it looks like just good solid performance."
With fourth-quarter productivity forecasted to increase, today's number wasn't a huge surprise. According to Brian Gilmartin, portfolio manager at
Trinity Asset Management
, the decline in unit labor costs was the spark that ignited today's hot trading. "Unit labor costs declining was a big surprise. The biggest gains in productivity came in durable goods, probably in the auto manufacturers."
Today was a huge shopping spree on the tech-laden
Nasdaq Stock Market
Nasdaq Composite Index
had one of its best days ever, closing up 105.83, or 2.5%, at a record-breaking 4427.60.
After the bell today,
announced second-quarter earnings of 25 cents a share, a penny better than the 34-analyst
First Call/Thomson Financial
estimate. The company also set a 2-for-1 stock split.
In after-hours trading, Cisco was up 3 3/16 to 129.
Gilmartin said the report could be a predictor for tomorrow's trade activity. "If that number wasn't good, it could have really taken some hair off the market. There's a lot of optimism built into that stock."
ADRs were buoying up the Nasdaq, after it announced a new Internet strategy and a European wireless venture with
Elsewhere in techland,
TheStreet.com Internet Sector
index shot up 24.48, or 2.2%, to 1161.67, with
powering up by a hefty 6%.
took the honors for the index's biggest gains, up 26 7/8, or 16.9%, to 185.
TheStreet.com New Tech 30
bounded 14.41, or 2.2%, to 662.32. Unveiled Jan. 5, the TSC New Tech 30 is a market-cap-weighted index focusing on tracking the so-called hot money part of the market. A list of index components is available at
Biotechs continued to be a winner, with the
Nasdaq Biotechnology Index
up 5%. "Biotech stocks are starting to develop into real business with real revenues," said Gilmartin. "They're coming out with technologies that will be valuable to the pharmaceutical industry."
soared 13.4%, to 187 15/16.
Dow Jones Industrial Average
enjoyed a productive day, ending up 51.81 to 10,957.60. The interest-rate-sensitive financials were making a comeback, with
posting sizable gains.
"You're starting to see a rebound with brokers coming back close to their highs," said Gilmartin. "You've had P/E compression for the past year to 18 months in the sector as a result of the bear market in bonds. Fundamentals will eventually override interest-rate worries in these stocks."
No bearishness in bonds today. The 30-year Treasury leapt 1 14/32 to 98 18/32, its yield easing to 6.23%. (For more on the fixed-income market, see today's
American Stock Exchange Broker/Dealer Index
lifted 17.51, or 1.2%, to 1441.75, while the small-cap
popped 5.10, or 1%, to a record 537.49.
Market breadth wasn't gangbusters on the upside, but it did finish positive on big volume.
New York Stock Exchange
advancers topped decliners 1,590 to 1,413 on 1.059 billion shares, with 131 new 52-week highs outpacing 123 new lows. On the Nasdaq, 2,381 advancers beat 1,832 decliners on 1.963 billion shares, the second-highest volume in Nasdaq history. New highs led new lows 383 to 71.
Among other indices, the
Dow Jones Transportation Average
rose 10.59, or 0.4%, to 2582.80; the
Dow Jones Utility Average
gained 4.40, or 1.4%, to 311.31; and the
American Stock Exchange Composite Index
edged up 1.26 to 885.34.
For a look at today's top stocks in the news, see the Company Report, published separately.