Even if they didn't have much a reason, investors were in the mood to celebrate headed into the holiday weekend.
For the fourth day in a row, the
Nasdaq Composite Index climbed higher, gaining 62.5 points, or 3.3%, to 1961.4. The tech-heavy index gained 14% during the shortened trading week. (Keep in mind: It's still off about 62% from its peak last year.) The
Dow Jones Industrial Average and
S&P 500 finished higher as well.
Earlier in the day, bad news about corporate profits and headlines that confirmed an economic slowdown kept the major stock market indices underwater. But by lunchtime, Wall Streeters were looking for bargains, particularly in the tech sector.
"Investors are giving credence to the idea that the worst is over," said Jay Meagrow, vice president of trading at
earlier in the day. "We're seeing it in the tape, in the way stocks are reacting to news in the past few days."
This marked the first four-day rally for the Nasdaq since mid-August 2000, and the first week's worth -- albeit a truncated one -- of upside finishes since late-March 2000, back when the index had just retreated from the 5000 level.
Whether or not the recent gains will stick has been the subject of great debate among Wall Street experts. While some pros think today's advances were merely characteristic of bear-market rallies (which are often followed by sell-offs,) others have begun to feel the market is close to a bottom.
"The further we move off our lows, the better we feel," said Matt Johnson, head of Nasdaq trading at
. For his part, Johnson said he wasn't committed enough to today's market to say the gains are for real, but he was encouraged by the action.
retail sales report showed a 0.2% drop in sales at U.S. retailers during March, compared with expectations they would rise 0.1%. The weakness was offset by the fact that February sales were revised to unchanged from an initial estimate of a 0.2% drop. For months now, consumers have been pulling back from the spending sprees that helped buoy the economy for the past few years.
Positive earnings results from
gave a lift to technology stocks late in the trading day. Shares of Juniper closed up 18% to $50.38, But while the networker reported results in line with expectations, it warned that 2001 earnings and revenue will fall below forecasts.
On the heels of the retail sales news, retailer and
Dow Jones Industrial Average component
warned that it expects first-quarter earnings to fall below analysts' expectations. That announcement counteracted a report from
that its earnings for the most recent quarter met analyst expectations.
While Wal-Mart's news put pressure on the Dow earlier today, the blue-chip index closed up 113.40 points to 10126.94, back above the 10K benchmark. Since dropping to 9100 on March 22, the Dow has gained back more than 15% of its value. Shares of Wal-Mart fell 4.8% to $47.80, while GE's stock gained 1.6% to $43.95.
Further weighing on stocks this morning was news that consumer sentiment fell in early April. The University of Michigan's closely watched
Consumer Sentiment Index fell to 87.8 in April from 91.5 in March. The number, a key measure of consumers' confidence about the economy, came in well below the 90.5 reading that was expected. While the level doesn't signal a recession, it raises fears about the overall outlook for the economy and suggests that the stock market might not perform better in the near-term.
Certainly, negative earnings news does not help make the case for sustained gains. One day after an analyst upgrade on the semiconductor sector sent chip stocks rocketing higher, specialty chipmaker
warned that second quarter earnings would come in below consensus estimates.
Art Technology Group
, which manufactures software applications, said that it would cut 12% of its workforce and take a charge in the second quarter.
There have also been other glimmers of hope. Last night saw better-than-expected earnings reports from three tech leaders: notably
, handheld computing leader
Research in Motion
and networking hardware maker
But a second glance reveals a far less rosy picture. Yahoo!, Research in Motion and Redback all beat much-lowered estimates, while Yahoo! slightly dropped its forecasts for the rest of 2001 and announced layoffs. Yahoo slipped 1.3% to $15.65; Research in Motion jumped 14% to $25.01.
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closed down 21 points to 5767. Across the channel, the Paris
rose 11 to 5373. Frankfurt's
gained a 40 points, or 0.7%, to put the index at 5991.
The euro was lately trading at $0.8882.
Asian markets soared overnight on continued strength in tech stocks in the U.S. Tokyo's
jumped 177.5 points, or 1.357%, to close at 13,352.4. Hong Kong's stock market managed to ride up 283.0 points, or 2.2%, to 12,989.5.
The dollar was trading at 123.5 yen.
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