Stock Rally Lasts Through Third Day in a Row

Author:
Publish date:

(Reload this page for the latest update.)

Stocks closed higher across the board, with the small-cap

Russell 2000

outpacing the rest of the market's major indices, in a session marked by merger news and earnings, earnings, earnings, earnings.

The Russell ended up 9.58, or 2.8%, to 352.45. The

Dow Jones Industrial Average

ended up 49.69, or 0.6%, to 8466.45. The

S&P 500

advanced 5.98, or 0.6%, to 1062.40. The

Nasdaq Composite Index

gained 27.78, or 1.7%, to 1648.73.

The

Dow Jones Transportation Average

also jumped today, up 2.4%.

Just as an aside, today was also the 11th anniversary of Black Monday.

Meanwhile, the 30-year Treasury bond was lately down 2/32 to 108, yielding 4.98%. The long bond traded in a relatively narrow range.

On the

New York Stock Exchange

, 2,000 advancers led 1,102 decliners on 719.9 million shares.

Nasdaq Stock Market

winners beat losers 2,641 to 1,523 on 839.6 million shares.

On the NYSE, 38 issues hit new 52-week highs while 31 hit new lows. On the Nasdaq, 148 issues were at new lows while 25 reached new highs.

Several merger announcements and continued positive vibrations from last week's

Federal Reserve

intermeeting interest-rate cuts were a couple of reasons for the solid gains in the market today.

Utility and gold mining issues were notable losers. Transportation, airline, and technology and retail issues gained impressively.

Most active on the NYSE was

Citigroup

(CCI) - Get Report

, which ended up 7/8 to 42 11/16 on 15 million shares.

On the Nasdaq,

HBO & Co.

(HBOC)

was most active, with 51.4 million shares changing hands. It closed down 4 5/16, or 14.6% to 25 3/8. Yesterday,

McKesson

(MCK) - Get Report

said it will buy HBO & Co. for about $14.5 billion.

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

.

3:03 p.m.: Small-Caps Piling on More Gains in Home Stretch

After last week's big gains, a good number of market participants were expecting the market to pull back today.

So are we seeing a pullback in the market today? That

mydiscountbroker.com

TV ad says it best: "No, no, no."

The

Dow Jones Industrial Average

was up 62 to 8479. The

S&P 500

was up 6 to 1062, while the

Nasdaq Composite Index

was up 22 to 1643 and the

Russell 2000

was up 9 to 352.

The Dow has risen as high as 8515 and fallen as low as 8388.96.

In Treasuries, the 30-year bond was recently down 2/32 to 108 , yielding 4.98%.

On the

New York Stock Exchange

, 1,993 advancers were leading 1,051 decliners on 569 million shares.

Nasdaq Stock Market

winners were beating losers 2,556 to 1,462 on 640 million shares.

On the NYSE, 36 issues were at new 52-week highs while 27 were at new lows. On the Nasdaq, 127 issues were at new lows while new highs totaled 20.

Today's rally has surprised some traders, in part because of last week's rally.

"I would've expected a little more profit-taking," said Jay Suskind, head of institutional equity trading at

Ryan Beck

, before the Dow made its recent sharp upward move.

Today's spate of merger announcements was one factor lifting the market, traders said.

"Hopefully these deals hold," Suskind noted.

The market was also closely keeping tabs on earnings news.

Suskind said the many companies that have issued earnings warnings have already been discounted, so when they come in meeting or exceeding expectations they can get a nice pop to the upside.

Some of the other factors underpinning the market include Japan's passing banking legislation last week and lingering glee from the

Federal Reserve's

cut of both the federal funds and discount rates last week.

1:57 p.m.: Stocks Cruising in Place with Russell Out Front

Small-caps maintained most of their sizable gains as the blue-chip

Dow Jones Industrial Average

and the broader market

S&P 500

lost a good chunk of their earlier steam.

The

Russell 2000

was up 8, or 2.4%, to 351. The index, however, is still down roughly 20% year-to-date.

The Dow was up 40 to 8457, the S&P 500 was up 3 to 1059 and the

Nasdaq Composite Index

was up 18 to 1639.

Meanwhile, the 30-year Treasury bond, after opening in New York on the plus side, was lately down 2/32 to 108, yielding 4.98%.

Transportation issues were also higher today. The

Dow Jones Transportation Average

was up 1.8%

The Dow and the S&P 500 are well off their session highs. They were strong early on thanks to a rash of mergers and acquisitions and continued good feeling over last week's intermeeting interest rate cut of 25 basis points by the

Federal Reserve

.

On the

New York Stock Exchange

, 1,939 advancers were leading 1,031 decliners on 446 million shares.

Nasdaq Stock Market

winners were beating losers 2,375 to 1,450 on 520 million shares.

On the NYSE, 32 issues were at new 52-week highs while 26 were at new lows. On the Nasdaq, 104 issues were at new lows while new highs totaled 19.

Sector Focus: Supermarkets

In an effort, in part, to remain competitive with big discount superchains -- like

Wal-Mart

(WMT) - Get Report

-- which are stocking their shelves more and more with groceries, supermarket chains have been merging at a fairly decent clip lately. In the latest grocery deal,

Kroger

(KR) - Get Report

announced today it plans to buy

Fred Meyer

(FMY) - Get Report

, in a deal valued at $13 billion, including debt, with the combined company having $43 billion in sales. Kroger was off 2 3/16 to 46 9/16 while Fred Meyer dropped 4, or 8.2%, to 45.

Just last Tuesday,

Safeway

(SWY)

said it agreed to snap up

Dominick's Supermarkets

(DFF)

for $1.2 billion.

And in August,

Albertson's

(ABS)

agreed to buy

American Stores

(ASC) - Get Report

for nearly $12 billion. Albertson's, American Stores and Safeway were all lower, while Dominick's was higher.

12:50 p.m.: Midday Musings: Mergers Cheer a Still-Skittish Wall Street

11:55 a.m.: Small-Caps Extend Gains as Dow, S&P Falter

The small-cap

Russell 2000

continued to outperform the rest of the stock market, rising 1.8% as another heavy round of earnings reports flood the market coupled with a host of merger news.

The Russell was up 6 to 349. The

Dow Jones Industrial Average

was up 34 to 8451. The

S&P 500

was up 1 to 1057, while the

Nasdaq Composite Index

was up 11 to 1631.

Leading the Dow higher was

IBM

(IBM) - Get Report

.

Meanwhile, Dow component

McDonald's

(MCD) - Get Report

, recently reported third-quarter earnings which were in line with expectations. The fast-food giant reported earnings of 69 cents a share, right on

First Call's

17-analyst consensus estimate, up from the year-earlier 63 cents. The stock was lately down 1 1/16 to 67 1/8.

In Treasuries, the 30-year Treasury bond was unchanged at 108 2/32, yielding 4.98%, after surrendering its early gains.

On the

New York Stock Exchange

, 1,805 advancers were leading 982 decliners on 271 million shares.

Nasdaq Stock Market

winners were beating losers 2,150 to 1,284 on 336 million shares.

On the NYSE, 25 issues were at new 52-week highs while 16 were at new lows. On the Nasdaq, 80 issues were at new lows while new highs totaled 17.

Tech Focus

Among the technology indices today, the

Morgan Stanley High-Tech 35

index was up 1.5%, the

Philadelphia Stock Exchange Semiconductor Index

was off 0.4% while the

American Stock Exchange Inter@ctive Week Internet Index

was up 2.3%.

After months of wrangling, jockeying, filing and arguing, the

Justice Department's

antitrust trial against software behemoth

Microsoft

(MSFT) - Get Report

began this morning in Washington. Mister Softee was down 3 1/4 to 101 3/4.

Meanwhile,

Intel

(INTC) - Get Report

, the world's largest chip maker, said this morning it's buying

Shiva

(SHVA)

, a remote access provider, for $6 a share. Shiva closed at 4 1/4 on Friday. Today it was up 1 7/16, or 34.9%, to 5 9/16, while Intel rose 5/8 to 84 5/16.

In the Newsletters

Compaq

(CPQ)

appears poised to more aggressively pursue direct sales even while boosting its reliance on service and enterprise solution partners, according to the top story on

Computer Reseller News'

Web site. The article, citing "channel sources," said Compaq is on the verge of launching a direct-sales effort to small and midsize businesses, extending beyond its current

DirectPlus

program.

10:59 a.m.: Russell Leads as Stocks Head Firmly Higher

The small-cap

Russell 2000

was pacing the market as the rest of the major market indices were also higher, while a shower of earnings and merger-and-acquisition news splashed onto the market.

The Russell was up 5, or 1.6%, to 348. The

Dow Jones Industrial Average

was up 62 to 8479, the

S&P 500

was up 5 to 1061 and the tech-heavy

Nasdaq Composite Index

was up 11 to 1632.

Meanwhile, Treasuries gave up a modest early advance. The 30-year Treasury bond was lately down 4/32 to 107 30/32, yielding 4.99%.

Jim Benning, a trader at

BT Brokerage

, said he's kind of surprised the market's up today after last week's rally and a day after options expiration, when the market tends to sell off somewhat.

The upside today isn't exactly robust, however. Benning said it's relatively quiet so far.

Semiconductor, gold mining and utility stocks have tumbled so far this morning. Meanwhile, banks, which opened slightly softer, have reversed course and firmed. The

Philadelphia Stock Exchange/KBW Bank Index

was lately up 0.9%.

J.P. Morgan

(JPM) - Get Report

reported earnings of 58 cents a share, drastically lower than

First Call's

13-analyst consensus of 81 cents a share, while

Bank of New York

(BK) - Get Report

reported third-quarter earnings of 39 cents a share, in line with a 21-analyst estimate, and up from the year-earlier 34 cents a share.

Financials, which have been crushed in the market's late summer and early fall downturn, have risen lately in part because there are some good values in that area and thanks to last week's

Federal Reserve

short-term interest-rate cut.

Auto stocks, another sector that will benefit from low rates, were higher today also, Benning noted.

On the

New York Stock Exchange

, 1,754 advancers were leading 881 decliners on 182 million shares.

Nasdaq Stock Market

winners were beating losers 1,922 to 1,148 on 228 million shares.

On the NYSE, 17 issues were at new 52-week highs while 13 were at new lows. On the Nasdaq, 60 issues were at new lows while new highs totaled 15.

10 a.m.: Indices Start the Week Mixed

Stocks were mixed out of the gate in the wake of some major acquisition announcements yesterday and early this morning.

The

Dow Jones Industrial Average

was down 22 to 8395. The

S&P 500

was down 1 to 1055 and the

Nasdaq Composite Index

was down 7 to 1614, while the

Russell 2000

was up 1 to 344. (The Dow and the S&P moved into positive territory after these figures were compiled.)

Meanwhile, the 30-year Treasury bond was up 5/32 to 108 7/32, yielding 4.97%.

This morning, it was announced

Kroger

(KR) - Get Report

will buy

Fred Meyer

(FMY) - Get Report

in a deal valued at $13 billion, including debt, with the combined company having $43 billion in sales.

Most Up at Open -- NYSE

Bankers Trust (BT) , up 2 to 53 3/8

: Negative rumors plagued Bankers Trust on Friday, hammering the stock.

Most Up at Open -- Nasdaq

RealNetworks (RNWK) - Get Report, up 3 1/8 to 38

: RealNetworks and

Netscape

(NSCP)

announced an agreement to distribute and include RealNetworks'

RealPlayer

software with Netscape's

Netscape Communicator 4.5

, available this week, and through Netscape's Internet portal

Netcenter

.

Most Down at Open -- NYSE

SunAmerica (SAI) , down 1 5/8 to 70 1/8

.

Most Down at Open -- Nasdaq

HBO & Co. (HBOC) , down 3 7/16 to 26 1/8

:

McKesson

(MCK) - Get Report

agreed to buy HBO for about $14.5 billion.