Stocks Close Broadly Higher in Light Trading

Financial and tech stocks were among the market's leaders.
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Stocks closed out a turbulent week sporting a widespread advance in light preholiday volume.

Financial and tech stocks were among the market's leaders today. Soothing economic news, a firmer bond market and short-covering were among the hodgepodge of reasons cited for today's march higher.

The

Nasdaq Composite Index

outpaced all major market barometers on the upside percentage-wise. The Nasdaq 100 surged 1.9%.

The

Philadelphia Stock Exchange/KBW Bank Index

rose 2.4%, while the

American Stock Exchange Broker/Dealer Index

hopped 1.9%.

Financial titans

American Express

(AXP) - Get Report

and

J.P. Morgan

(JPM) - Get Report

powered the blue-chip

Dow Jones Industrial Average

.

The

Chicago's purchasing managers' index

, a key measure of how the manufacturing sector is performing, fell to 57.9 in May from April's reading of 63.3, helping to calm inflation and rising interest rate worries. Also helping was that the index's prices paid reading fell to 52.5 in May from 56.7 in April.

Looking ahead, the markets will face some key economic data next week, including the release of the

National Association of Purchasing Management's

May index and the May

employment report

.

The bond market closed early ahead of the long Memorial Day weekend. The 30-year Treasury bond ended slightly higher.

On the

New York Stock Exchange

, advancers beat decliners 1,945 to 979 on 653 million shares. On the

Nasdaq Stock Market

, winners beat losers 2,328 to 1,535 on 679 million shares.

On the NYSE, 25 issues set new 52-week highs while 20 touched new lows. On the Nasdaq, 59 issues set new highs while new lows totaled 37.

On the Big Board,

America Online

(AOL)

was most active, with 12.9 million shares changing hands. It was up 3 1/8 to 119 1/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 20.7 million shares changing hands. It was up 2 3/8 at 80 11/16.

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

3:02 p.m.: Stocks Solidly Higher in Thin Volume

Stocks were holding on to solid gains going into the final hour of today's session as traders prepare to close the books on a bumpy May.

Despite the solid advances in the market, there's plenty of caution on Wall Street about the market over the near term, with a fair amount of market participants saying they don't think the selling in the market is through just yet.

Next week, the market will face some big economic data, with the highlight being next Friday's release of the May

employment

report.

Economic news today aided the market.

Chicago's purchasing managers' index

, a key measure of how the manufacturing sector is performing, fell to 57.9 in May from April's reading of 63.3 eased inflation and rising interest rate worries. Also helping calm jitters was that the index's prices paid reading fell to 52.5 in May from 56.7 in April.

Ricky Harrington, chief technical analyst at

Wachovia Securities

in Charlotte, N.C., said today's rally was due in part to the market reaching a little bit of an oversold condition. He also said the market usually has an upside bias ahead of a three-day weekend.

Harrington said the market's overall loss of leadership from the financial and technology stocks, which represented leadership for a long time, is a big problem, because he says that when you don't have leadership, there are more chances of the market weakening.

Harrington said today's advance probably won't take the market very far going forward and he expects stocks to retest its recent lows. For the Dow, that test would come around the 10,450 level, he said.

Market internals were positive.

On the

New York Stock Exchange

, advancers were beating decliners 1,900 to 971 on 510 million shares. On the

Nasdaq Stock Market

, winners were beating losers 2,183 to 1,534 on 525 million shares.

On the NYSE, 15 issues had set new 52-week highs while 19 had touched new lows. On the Nasdaq, 34 issues had set new lows while new highs totaled 45.

On the Big Board,

America Online

(AOL)

was most active, with 10 million shares changing hands. It was up 3/8 to 116 3/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 15 million shares changing hands. It was up 2 1/16 to 80 3/8.

The 30-year Treasury bond ended the session slightly higher on thin volume. The bond market closed early ahead of the long holiday weekend.

2:03 p.m.: Stocks Sharply Higher After Bullish Data Out of Chicago

Heading into this afternoon, stocks were sharply higher, with thanks for the advance placed in part on soothing economic news out of the Windy City.

News that

Chicago's purchasing managers' index

, a key measure of how the manufacturing sector is performing, fell to 57.9 in May from April's reading of 63.3, trimmed inflation and rising interest rate worries. Also helping ease jitters was that the index's prices paid reading fell to 52.5 in May from 56.7 in April.

While most sectors of the market are sharply higher, gold mining and forest and paper product stocks slumped. The

Philadelphia Stock Exchange Gold and Silver Index

was off 2%, while the

Philadelphia Stock Exchange Forest & Paper Products Index

was down 1%.

Also helping the market today, according to some, were bargain hunters.

On the

New York Stock Exchange

, advancers were beating decliners 1,855 to 958 on 443 million shares. On the

Nasdaq Stock Market

, winners were beating losers 2,115 to 1,475 on 455 million shares.

On the NYSE, 13 issues had set new 52-week highs while 17 had touched new lows. On the Nasdaq, 32 issues had set new lows while new highs totaled 43.

On the Big Board,

America Online

(AOL)

was most active, with 9 million shares changing hands. It was up 7/8 to 116 7/8.

On the Nasdaq,

Microsoft

(MSFT) - Get Report

was most active, with 15 million shares changing hands. It was up 2 1/16 to 80 3/8.

12:47 p.m.: Midday Musings: Stocks Zipping Higher in Light-Volume Trading

11:59 a.m.: Stocks Continue Higher After Supportive Economic Data

Favorable economic news and bargain hunting were cited as reasons for today's rally, which has sent major market averages sharply higher.

Major averages, however, have since come a bit off their session highs.

News that

Chicago's purchasing managers' index

, a key measure of how the manufacturing sector is performing, fell to 57.9 in May from April's reading of 63.3, trimmed worries that inflation was increasing. Also helping the market's mood was the index's prices paid index reading, which fell to 52.5 in May from 56.7 in April.

Few sectors in the market were softer as stocks advanced broadly.

The 30-year Treasury bond, which has traded in a relatively narrow range so far, recently dipped into negative territory.

On the

New York Stock Exchange

, advancers were beating decliners 1,793 to 853 on 294 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,899 to 1,351 on 291 million shares.

On the NYSE, 11 issues had set new 52-week highs while 8 had touched new lows. On the Nasdaq, 23 issues had set new lows while new highs totaled 32.

On the Big Board,

America Online

(AOL)

was most active, with 7 million shares changing hands. It was up 1 3/16 to 117 3/16.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active, with 10 million shares changing hands. It was up 1/16 to 53 3/16.

Tech Focus

Tech sector gauges were mostly higher late this morning. The

Philadelphia Stock Exchange Semiconductor Index

-- which soared yesterday despite the overall weakness in the market -- was off 1%.

Elsewhere, the

Nasdaq 100

rose 1%, while the

Morgan Stanley High-Tech 35

was also up 1%. The

Philadelphia Stock Exchange Computer Box Maker Index

, however, was up fractionally.

StarMedia

(STRM:Nasdaq), which some have dubbed the America Online of Latin America, continued its ascent after going public this week. It was up 10 3/4, or 24%, to 56 1/4. It was also fourth-most active stock on the Nasdaq, with 5 million shares changing hands.

Computer Associates

(CA) - Get Report

was a notable winner, up 3, or 7%, to 47, in the wake of its stronger-than-expected fourth-quarter earnings report released yesterday. The company posted earnings of 83 cents a share, a penny above the

First Call

24-analyst estimate and above the year-ago 75 cents. Today

CIBC World Markets

raised its rating on Computer Associates to strong buy from hold, while

Prudential Securities

raised its price target on the stock to $50 from $45.

11:02 a.m.: Stocks Recover a Bit After Thursday's Selloff

Stocks rose thanks in part to some relatively soothing economic news and on buying from those who think yesterday's selloff may have been overdone.

Although the gains have been solid, trading was light for the most part.

Peter Coolidge, managing director of trading at

Brean Murray Foster Securities

, said the holiday on Monday and the increased volatility this week has led to the inaction in the market today.

Overall, as it has for a while now, the market is keeping its eye on interest rates, he said. The big question is, he said, is the

Fed

going to raise interest rates, and if so, when? The

Federal Open Market Committee

next meets on June 29-30.

The 30-year Treasury bond, after spending some of the morning on the soft side, has risen into positive territory and was modestly higher after the release of the May

Chicago Purchasing Managers' Index

, which fell to 57.9 from 63.3 in April. The prices paid index also dropped in May, falling to 52.5 from 56.7 in April, helping to ease inflation fears.

On the

New York Stock Exchange

, advancers were beating decliners 1,815 to 721 on 204 million shares. On the

Nasdaq Stock Market

, winners were beating losers 1,761 to 1,170 on 198 million shares.

On the NYSE, 11 issues had set new 52-week highs while 6 had touched new lows. On the Nasdaq, 19 issues had set new lows while new highs totaled 30.

On the NYSE,

Galileo

(GLC)

was most active, with 6 million shares changing hands. It was up 5/16 to 45 5/16.

KLM Royal Dutch Airlines

said it completed the sale of its interest in Galileo, a travel services provider.

On the Nasdaq,

Intel

(INTC) - Get Report

was most active, with 8 million shares changing hands. It was up 3/8 to 53 1/2.

9:58 a.m.: Stocks Open Mostly Higher in Thin, Quiet Trading

Most stocks opened slightly higher in what is likely going to be a light volume day -- the last session of what has turned into a rocky month for stocks -- as scores of market participants take off early for the long Memorial Day weekend.

The bond market will close early today ahead of the holiday weekend.

Yesterday, the Dow tumbled 235.23, or 2.2%, while the S&P 500 dropped 23.35, or 1.8%.

For the month of May, as of yesterday's close, the Dow was down about 3%; the

S&P 500

was off approximately 4%; while the

Nasdaq Composite Index

was down roughly 5%.

Economic news so far has been a nonevent. The

Commerce Department

reported

personal income

rose 0.5%. Looking ahead, at 10 a.m. EDT, the

Chicago Purchasing Managers' Index

is slated for release.

Most Up at Open -- NYSE

DLJdirect (DIR) , up 2 1/2 to 40 1/2

.

Most Up at Open -- Nasdaq

StarMedia (STRM) - Get Report, up 10 1/16 to 55 9/16

.

Most Down at Open -- NYSE

Newport News Shipbuilding (NNS) , down 4 3/4 to 28

: The

Defense Department

is recommending against

Litton Industries'

(LIT) - Get Report

unfriendly bid for Newport News on the grounds that the proposed takeover would cause too much concentration in the military shipbuilding business, the

New York Times

reported.

Most Down at Open -- Nasdaq

priceline.com (PCLN) , down 3 13/16 to 107

.