Driven by continuing optimism the economy is pepping up from its slowdown, investors snapped up tech stocks for the fourth day in a row, while they took some fresh profits from blue-chips.
Nasdaq Composite Index finished up 52, or 2.4%, to 2221 -- its highest level since March 6. Since closing at a low of 1638.8 on April 4, the Nasdaq is up 36% through Wednesday's close. A report that came out this morning saying the networking market in the U.S. was stabilizing raised Wall Street's hopes about a recovery in tech companies.
Shares of Nasdaq bellwether
rose 12.4% to $20 after
analyst Chris Stix said "we received some positive data points regarding North American enterprise networking spending." The
American Stock Exchange Networking Index
jumped 6%. Like the Nasdaq itself, Cisco is still significantly off its 52-week high of $71.68.
As investors continued to move back into what they view as rapid growth sectors, the
Dow Jones Industrial Average flip-flopped late in the trading day. It finished down 22 points, or 0.2%, to 10,877. Yesterday, the blue-chip index ended at its highest level since Feb. 13. Since touching an intraday low of 9100 on March 22, the Dow is up 19.5%, but still off its record high.
Within the context of recent gains, traders weren't worried about today's losses on the Dow. "We were up 165 points yesterday, and we gave back 22 points today," said Art Hogan, market analyst at
. "We shouldn't get ahead of ourselves in being concerned about this."
Dragging on the industrials were shares of
, which fell 2.6% to $86.50 after industry data released this morning showed a large increase in petroleum inventories. Crude oil futures took a hit this morning following the report.
Other blue-chip stocks finished lower as well: Drug company
was down 0.9% to $74.91, while manufacturing conglomerate
was lower by 0.8% to $116.55.
After a few light volume days, trading activity was heavier on both the
New York Stock Exchange and the Nasdaq. "What's happening is that investors don't want to be left out," said Peter Green, market analyst at
Gerard Klauer Mattison
. "So, they're buying tech aggressively."
But despite today's run-up in technology, experts observed a pullback in companies that have helped led the recent rebound. "Both Microsoft and IBM couldn't hold their opening prices today," Green said. "After such a large advance, we're seeing some profit taking in those names." Shares of
finished off 0.6% to $69.76, while
closed down 2.6% to $115.40.
Among stocks in the news,
jumped 16.3% to $49.94 after the networking equipment provider said it would
meet or exceed third-quarter expectations. And name-your-own-price e-tailer
advanced 5.6% to $6.96 after it reported first-quarter results that showed a narrower loss and higher revenue. (
Tim Arango discusses why analysts think the recent surge in priceline's stock
has left it pricey.)
Looking at the sectors driving today's action, drug, retail and oil sectors finished lower, while semiconductor, computer hardware, dot-com and networking stocks moved higher.
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European markets had volatility in tech and the heavily weighted telecom sector. London's
, which started on a positive note amid tech gains, traded down 24 points to 5904. In Frankfurt, the
shed 61 to 6204. In Paris, the
lost 67 to 6204.
Tokyo stocks ended flat on Wednesday as profit-taking offset gains by technology issues. The benchmark
dipped 3.82 to 14,421.64. Technology issues rose on renewed optimism that computer and semiconductor makers' earnings would be better than expected.
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