For once, a broad-based rally that doesn't come with qualifiers. Well, except for the lousy volume.
Perhaps the surprisingly good weather in the Northeast this weekend has folks freshly scrubbed and confident today, as all major indices at midsession were well into the green, led by buying in the technology sector.
Nasdaq Composite Index was rallying, up 146, or 4.6%, to 3351, and the
Dow Jones Industrial Average had gained 150, or 1.5%, to 10,449, while the
S&P 500 was up 25, or 1.8%, or 1403. The small-cap
Russell 2000 was up 10, or 2.1%, to 467.
Some expected a negative reaction from this morning's release of the
Consumer Confidence Index, which rose to 144.4 in May, a four-month high after falling to a revised 137.7 reading in April. The survey demonstrates that job security and wage growth are more than offsetting the decline in stock prices in the mind of consumers, and analysts worry that the
Fed may remain in attack mode in its efforts to slow the economy.
Regardless, traders say that investors are balancing those concerns against the belief that the technology sector has been wrecked enough to provide a good buying opportunity.
Big-cap tech stocks are leading the way, including the
Nasdaq Stock Market's
, up 2 11/16 to 57 5/8 on 24.3 million shares;
, up 9.7%; and
, up 9.4%.
Major technology indices were strong, including the
Philadelphia Stock Exchange Semiconductor Index
, gaining 6.8%, and the
Nasdaq Telecommunications Index
, up 6.3%. New
analyst Dan Niles transferred a lot of his coverage from his old shop,
, and reiterated support of computer and chip stocks overall this morning.
TheStreet.com Internet Sector
index was up 37, or 5%, to 790, helped by the likes of
6.6% gain and a 6.3% advance in
As with all rallies, this one provokes traders to question whether it will sustain itself, especially with worries about the Fed, and the market's recent tendency to quickly give back what it has gained.
"People saw opportunities and then took them," said Randy Billhardt, co-head of block trading at
. "Certainly, the Nasdaq had been in oversold territory, and we're seeing strength there and in the financials, but there's not a lot of oomph behind the move."
It has investors thinking that the market may be in for a week similar to last week, where a day of mostly positive action alternates with a day of dreary, ugly selling. Already, there's a couple of important economic reports in the market's way this week, including the
National Association of Purchasing Management's
Purchasing Managers' Index, an important survey of manufacturing sentiment, and the May
employment report, due out Friday.
"People had a three-day weekend to look at prices and see some good, long-term values, and say, 'Let's go after them,'" said Allan Meyers, portfolio manager of the
Kent Growth & Income Fund
in Grand Rapids, Mich. "But as to whether it can hold these gains now, I'd say no. I think we still have some more churning to do."
The lack of conviction is supported by the lack of volume and some sector weakness. Strong sector advances include the commodity-related stocks, such as natural gas companies, and the brokerages, which were hosed last week after reports that
may miss second quarter earnings estimates. The
American Stock Exchange Broker/Dealer Index
American Stock Exchange Natural Gas Index
rose 1.9%, and the
Philadelphia Stock Exchange Oil Service Index
Morgan Stanley Consumer Index
was lately down 0.3% in lackluster trading.
had risen earlier but lately was off 1/4 to 18 5/16, after announcing plans to divest
leather and other businesses to focus on food, beverage and household products.
American Stock Exchange Pharmaceutical Index
was down 1.1%, and the
American Stock Exchange Tobacco Index
"Across the board, there appears to be some selling of the old growth companies," said Ned Riley, chief investment strategist at
State Street Global Advisors
. "The health care, beverage, restaurant chains are weaker in face of the estimate of Fed hikes based on the consumer confidence survey."
Dow Jones Transportation Average
was up strong, gaining 1.8%, while the
Dow Jones Utilities Average
was down 1%.
Breadth was solidly positive on modest volume.
New York Stock Exchange
: 1,711 advancers, 1,066 decliners, 467 million shares. 29 new highs, 41 new lows.
Nasdaq Stock Market
: 2,444 advancers, 1,329 decliners, 756 million shares. 24 new highs, 85 new lows.
For a look at stocks in the midsession news, see Midday Stocks to Watch, published separately.