Posted at 11:49 a.m., Thursday, December 27, 2001
Trust in technology stocks spurs market
| • | Hawai'i Stocks |
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By Lisa Singhania
Associated Press
NEW YORK — Buying in technology lifted the stock market today as investors bet that the beleaguered sector's prospects for recovery are improving.
"Technology has done poorly so far this year, but it is still a place that people want to be in, that they believe in," said Rafael Tamargo, director of equity research at Wilmington Trust. "People are expecting that is where the growth is going to come from when the market recovers."
The Dow Jones industrial average closed up 43.17, or 0.4 percent, at 10,131.31, according to preliminary calculations.
Broader stock indicators were also slightly higher. The Nasdaq composite index gained 15.72, or 0.8 percent, to 1,976.42. The Standard & Poor's 500 index advanced 7.76, or 0.7 percent, to 1,157.13.
Tech stocks rose for a second day in a continuing reaction to holiday sales reports yesterday that weren't as bad as the market had feared. The market interpreted the numbers as proof that consumers are still willing to spend — good news for technology companies that sell products used in the retail market.
IBM rose $1.10 to $123.18, Texas Instruments climbed 70 cents to $28.75 and Apple Computer advanced 58 cents to $22.07.
Retailers were mixed, however. Discounter Target rose $1.19 to $39.65, while AnnTaylor gave back some of the previous session's gains, falling 28 cents to $34.22.
Wall Street also focused on energy stocks as OPEC is expected to approve a reduction in output starting Jan. 1, a move that is expected to help stabilize flagging oil prices. ExxonMobil rose 19 cents to $39.79.
Investors were also monitoring the political situation in India and Pakistan amid concerns of a possible war between the nuclear powers. A new videotape of Osama bin Laden also reminded Wall Street that the risk is still significant for another terrorist attack or political event that could upset the market.
Stocks have rebounded significantly from the precipitous selloff that followed the Sept. 11 terrorist attacks. But since achieving pre-attack levels, the market's progress has become slower and more choppy.
Analysts have attributed the market's post-attack bounce largely to indications from a wide array of companies that business will improve next year. But the market has traded close to the levels it held before Sept. 11 as investors want to be sure the economy is indeed recovering before they make larger commitments to stocks and are wary of getting overly enthusiastic.
"We have corporations with a lot clearer vision about the future than they did a year ago. ... It is nice that the market has rebounded, but you want to make sure you have earnings growth ahead," said Thomas Lydon Jr., president of Global Trends Investments in Newport Beach, Calif.
It's also common for issues to move higher between Christmas and New Year's in what's known as a Santa Claus rally, although it's doubtful the indexes will break even for the year.
Advancing issues led decliners about 2 to 1 on the New York Stock Exchange. Trading volume has been light this week because of the holidays, making stocks more susceptible to fluctuations since there were fewer prospective buyers or sellers.
The Russell 2000, the barometer of smaller company stocks, index rose 2.43, or 0.5 percent, to 492.62.
