SAN FRANCISCO -- In the wake of yesterday's big market losses and George W. Bush's big victory in the primaries, conservatism was in vogue today as traders voted for blue-chips. But there was compassion for the Nasdaq Composite Index, too, as the tech proxy recovered from some steep midmorning losses to close modestly higher.
The action was embodied by drug stocks, which rose from a pronounced slump as investors went searching for value. Leading the way were
, up 10.1%, and
, higher by 10.9%;
upped recommendations on each. The
American Stock Exchange Pharmaceutical Index
Meanwhile, investors were encouraged as crude prices declined 8.9% to $31.10 a barrel after
hinted higher production is forthcoming.
"Oil coming down psychologically helps because it could make the
less aggressive," said Robert Harrington, co-head of block trading at PaineWebber. "Some people are looking at some old-economy stocks that got oversold short-term. We're seeing a decent bounce-back rally, but will have to see if it follows through."
Follow-through was a problem for blue-chips even today. After rising as high as 9918.89 behind strength in drugmakers
Johnson & Johnson
Dow Jones Industrial Average
closed up 60.50, or 0.6%, to 9856.53.
Harrington predicted the index will continue to be volatile as it "tries to find a base around this level from which maybe it can work higher later in the year."
The Dow was restrained by weakness in
Procter & Gamble
fell a further 5.1% after
was a positive influence on the Dow, rising 2.8% on news of its
Ariba rose 2% and i2 gained 12.4%, holding the high-tech fort against marauding sellers until the rest of the tech cavalry appeared after lunchtime.
From its intraday low of 4722.14 at around 11 a.m. EST, the Nasdaq rose steadily and inexorably until about 3:30 p.m. before closing up 49.55, or 1%, to 4897.39.
Gotta Have Faith
Even at the Nasdaq's nadir, few market players believed the action suggested blue-chips would revive at the expense of tech names for long.
Charles Payne, chief analyst at
Wall Street Strategies
, recalled that the
last time the Dow dipped below 10,000, the Nasdaq took a bit of a powder before storming back in earnest.
"You saw some bargain-hunters coming out with drugs the biggest beneficiaries. But I don't think the game has changed," Payne said. "In a couple of days more of the buying and cash flow will be redirected back into the Nasdaq."
That desire reasserted itself today. Gains by bellwethers such as
helped the Comp overcome weakness in tech stalwarts such as
Yesterday's dichotomy between P&G and
is the "snapshot that told the story" of why investors just can't stay away from the Comp, Payne said. "The reality is, I can find value all day long
on the Big Board but people want instant gratification. They want to make money."
PaineWebber's Harrington agreed, noting the 10.9% rise for
, which announced a business-to-business marketing alliance with
"That kind of momentum is still going to continue," the trader said. "That's where the action is going to be."
Chip and chip-equipment makers such as
took a break from their recent momentum, however. The
Philadelphia Stock Exchange Semiconductor Index
Internet favorites such as
fared better, helping
TheStreet.com Internet Sector
index rise 38.71, or 3.1%, to 1288.01.
In IPO action,
, the Japanese email service, rose 414% on its first day of trading.
rose 11.10, or 0.8%, to 1366.72, aided by recently punk groups such as drug makers, transports and retailers but restrained by large-cap tech names and financials.
, meanwhile, declined 0.79, or 0.1%, to 594.68 amid negative market internals and as biotech stocks paused from their recent upturn. The
American Stock Exchange Biotech Index
fell 5.5% thanks to losses by names such as
, which fell 9.9%.
Additionally, oil service stocks got hit by the declining crude prices.
Donaldson Lufkin & Jenrette
cut its recommendations on the group, sending
Santa Fe International
down more than 10% apiece. The
Philadelphia Stock Exchange Oil Service Index
New York Stock Exchange
trading, 1.199 billion shares were exchanged while declining stocks led advancers 1,535 to 1,429. In
Nasdaq Stock Market
action 1.983 billion shares traded while losers led 2,365 to 1,895. New 52-week lows bested new highs 250 to 50 on the Big Board while new highs led new lows 198 to 164 in over-the-counter trading.
Among other indices, the
Dow Jones Transportation Average
rose 88.94, or 3.9%, to 2352.53; the
Dow Jones Utility Average
shed 3.52, or 1.3%, to 276.47; and the
American Stock Exchange Composite Index
lost 15.54, or 1.5%, to 1001.40.
The price of the 10-year Treasury note fell 1/32 to 100 28/32, yielding 6.38%.
For coverage of today's top stocks in the news, see the Company Report, published separately