Posted at 11:45 a.m., Wednesday, May 02, 2001
Tech stocks rise on growing optimism
Associated Press
NEW YORK — Technology stocks stretched their winning streak to four sessions today as investors grew more optimistic about the sector's chances for recovery this year. But the market was still cautious, and so blue chips fell on some mild profit-taking.
The Nasdaq composite index closed up 52.36 at 2,220.60, according to preliminary calculations.
Early figures show other market indicators were mixed. The Dow Jones industrials fell 21.66 to 10,876.68 after reaching its highest close in nearly three months yesterday. The Standard & Poor's 500 index inched up 0.98 to 1,267.42.
Overall, analysts said, the market continues to gain strength as investors grow increasingly confident that the Federal Reserve will reduce interest rates for the fifth time this year when it meets May 15.
Wall Street witnessed that optimism yesterday as the Dow finished at 10,898.34, its best close since Feb. 13, when it reached 10,903.32. More spectacularly, the Nasdaq has climbed 35.5 percent from its closing low for the year, 1,638.80, reached less than a month ago on April 4.
Strength was apparent in tech stocks today. Cisco Systems rose $2.20 to $20 after Morgan Stanley Dean Witter analyst Chris Stix said the networking equipment maker's North American business has stabilized. Applied Micro Circuits, also a networker, advanced $1.08 to $27.54.
But traders cashed in some profits in nontech sectors that have surged higher the past few weeks. The market is still concerned about how long it will take for earnings and the economy to show substantial improvement, analysts said.
Companies are now expected to post their weakest earnings in the second quarter rather than the year's first three months, said Ronald J. Hill, investment strategist at Brown Brothers Harriman.
Much of the Dow's losses came from IBM, down $3.11 at $115.40, and Philip Morris, which fell $1.09 to $51.01.
The energy and oil sectors also pulled blue chips lower, which analysts said reflected worries over summer cooling bills and burgeoning crude oil reserves.
Duke Energy fell $1.80 to $44.80, and Exxon Mobil, a Dow stock, tumbled $2.30 to $86.50.
Declining issues matched advancers on the New York Stock Exchange where volume was 1.34 billion shares, up from 1.16 billion yesterday.
The Russell 2000 index, which measures the performance of smaller companies stocks, rose 1.17 to 491.64.
Overseas markets were mixed. Japan's Nikkei stock finished the day essentially flat. In Europe, Germany's DAX index fell 0.8 percent, Britain's FT-SE 100 slipped 0.4 percent, and France's CAC-40 lost 1.2 percent.
