Nasdaq, S&P Close at New Record Highs

Stocks gained in part on optimism over the upcoming second-quarter earnings season.
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Most major market averages managed to fight off a stronger-than-anticipated economic report and post solid gains as the

Nasdaq Composite Index

and the

S&P 500

closed at record highs again today.

The market's major barometers slumped to their session lows right after the 10 a.m. EDT release of the

National Association of Purchasing Management's

June

Purchasing Managers' Index

, which rose to 57.0 from 55.2 in May. The Nasdaq Comp, S&P 500 and

Dow Jones Industrial Average

bounced off their session lows, clawed their way into positive territory and by session's end were sporting nice advances.

The Dow came up shy of closing at an all-time high. Its record closing high is 11,107.19.

Union Carbide

(UK)

was the biggest boost to the Dow. Union Carbide was up 3 9/16, or 7.3%, to 52 5/16.

Stocks gained in part on optimism over the upcoming second-quarter earnings season.

The 30-year Treasury bond also hit its session nadir after the release of the NAPM report. However, the long bond never rose above water the rest of the session, but it did manage to pare a big chunk of its losses.

Looking ahead, on the economic front, tomorrow at 8:30 a.m. EDT, the June

employment report

is slated to be released.

The

Russell 2000

spent the entire session in negative territory. It ended in the red in the wake of yesterday's reconstitution of the index.

Internet stocks turned in a strong performance as

Lycos

(LCOS)

and

RealNetworks

(RNWK) - Get Report

powered

TheStreet.com Internet Sector

index handsomely higher.

On the

New York Stock Exchange

, advancers beat decliners 1,696 to 1,374 on 833.8 million shares. On the

Nasdaq Stock Market

, winners beat losers 2,002 to 1,968 on 1.08 billion shares.

On the NYSE, 108 issues set new 52-week highs while 33 touched new lows. On the Nasdaq, 178 issues set new 52 week highs while new lows totaled 30.

On the Big Board,

America Online

(AOL)

was most active, with 21.2 million shares changing hands. It was up 2 to 112. It was named as one of

Lehman Brothers'

"10 Uncommon Values."

TheStreet.com

wrote about the list in a story

this morning.

Separately, AOL and

eMachines

, a low-priced PC manufacturer, set a pact under which AOL and

CompuServe 2000

software will be integrated into all eMachines PCs, and will be accessible via icons featured on the eMachines desktop. Under the pact, AOL will also make a minority investment in eMachines. In addition, eMachines and AOL's CompuServe will offer a special limited-time retail promotion beginning early this summer.

On the Nasdaq,

Starbucks

(SBUX) - Get Report

was most active, with 73 million shares changing hands. It was down 10 1/2, or 28.1%, to 26 15/16. The company yesterday forecast 1999 earnings of 54 cents a share, below the

First Call

20-analyst forecast of 60 cents but above the year-ago 44 cents. The company said it expects the 6-cent shortfall to be evenly split between the last two quarters of the fiscal year.

Company Focus: Watson Pharmaceuticals

Watson Pharmaceuticals

(WPI)

, after not

commenting on "rumors," commented.

Twice.

What's next? The

Garbo

interview on the cover of

Talk

?

The embattled Corona, Calif., generic drug company said in "response to what Watson believes was misinformation in the marketplace concerning its quarterly results" that it would meet revenue and earnings expectations for the quarter. The company is expected to earn 43 cents a share in the second quarter, according to

First Call

.

It also said, in a separate release that Allen Chao, chairman, chief executive and president, had been diagnosed with "very early stage stomach cancer." He has undergone successful surgery and now is taking chemotherapy.

So, what the hell happened yesterday when the stock dropped more than 10%? It's screwy. Short hedge funds passing along bad rumors, perhaps.

Watson was up 2 1/4, or 6.4%, to 37 5/16.

-- Jesse Eisinger

Market data above are preliminary. Updated numbers and analysis will follow in the Market Roundup

Earlier...

3:07 p.m.: Nasdaq Leads Charge Higher

Heading into the final hour of trading, most major stock proxies were higher, led by the

Nasdaq Composite Index

, which, along with the

S&P 500

, is on track to close at record highs.

2:01 p.m.: Internet Sector Continues to Lead on the Upside

Internet stocks continued to shine, while most major market averages were slightly in the green this afternoon.

12:57 p.m.: Midday Musings: Wall Street Cheers Stocks' Resilience as Gains Continue

Noon: Stocks Mostly Higher as Internet Sector Jumps

Internet stocks were surging again, while major market averages were mostly higher as the 30-year Treasury bond continued sharply lower.

11:05 a.m.: Dow, Nasdaq Struggle Into Positive Territory

Major market averages were mixed in the wake of a stronger-than-expected economic report, as the small-cap

Russell 2000

was suffering the most in the wake of yesterday's reconstitution of the Russell indexes.

10:18 a.m.: NAPM Data Send Stocks to Session Lows

The release of a stronger-than-expected

Purchasing Managers' Index

for June has sent stocks and the 30-year Treasury bond to their session lows. Before the release of the data, the long bond was already down nearly a full point.