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Strong rally lifts U.S. stocks
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October 22, 1999: 5:09 p.m. ET
Gains especially pronounced among financials after bank reform compromise By Staff Writer Jill Bebar October 22, 1999: 5:09 p.m. ET
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. blue chip stocks staged a strong rally Friday, powered by gains in the financial services sector after Washington drew a step closer to key bank reform legislation.
The Dow Jones industrial average rallied 172.56 points, or 1.7 percent to 10,470.25. The blue chip index finished the week with a gain of 4.5 percent, raising its gain for the year to 14.04 percent.
On the New York Stock Exchange, gainers outnumbered losers by 1,994 to 1,041 as 956 million shares changed hands.
The Nasdaq composite rose 14.57 points to 2,816.52, and the S&P 500 index advanced 18.04, or 1.4 percent, to 1,301.65. The Nasdaq climbed 3.1 percent this week, its gain for the year rising to 28.45 percent. The S&P 500 index added 4.4 percent for the week and is now up 5.89 percent for the year.
The bond market huddled in a narrow range amid dealings limited by the day's absence of economic data releases and investors' focus on the erratic movements of the stock market. The bellwether 30-year Treasury bond rose 2 of a point in price, leaving its yield unchanged from Thursday's 6.35 percent.
The dollar gained ground against the euro but finished nearly unchanged against the yen.
Financial shares rally
Back in the stock market, shares of financial companies rallied as a possible repeal of Depression-era banking laws appeared closer after the White House reached an agreement with congressional negotiators over a details of proposed banking overhaul legislation.
Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum, said the repeal boosted the financial sector and the general market.
"It shows immediate flow into a sector that has been underperforming. This is very positive for the market," he said.
Hyman added insurance companies stand to benefit the most from the legislative overhaul, which could eventually bring a wave of consolidation among them.
Among the gainers, Chubb (CB) advanced 2-15/16 to 48-13/16, and AIG (AIG) gained 5-15/16 to 91-13/16.
In addition, all three Dow financial components rose sharply, helping extend the index's gains. American Express (AXP) rose 3-3/4 to 148-5/8, Citigroup (C) added 1-1/4 to 48-3/16 and J.P. Morgan (JPM) climbed 8-7/16 to 125-5/8.
Earnings remain key
Among the day's stock market movers, investors focused on the companies that reported their latest quarterly results. Those that beat Wall Street's bottom-line expectations saw their stocks' value rise, but those that failed to meet the market's forecasts or issued profit warnings for the quarters to come saw their shares pummeled.
Among the top gainers, Swedish wireless communications equipment maker Ericsson (ERICY) rallied 5-1/4, or nearly 16 percent, to 39-1/16 after the company reported earnings that were lower than a year earlier but still surpassed analysts' expectations. Ericsson also issued an optimistic forecast for the quarters ahead, citing strong demand for its new mobile phone products.
Also on the rebound, technology stocks extended their late bounce-back from Thursday. Shares of Dow component IBM (IBM) -- which roiled the tech sector and the broader market a day earlier after reporting a lukewarm third quarter and issuing a profit warning for the two following quarters -- recovered from their deep slide, rising 2-7/8 to 93-7/8.
The Dow's other technology component, Hewlett Packard (HWP), edged up 7/8 to 75-7/8.
Elsewhere in the high-tech corner, Intel (INTC), due to introduce its fastest Pentium III chips Monday, rose 1-3/4 to 73-7/16 and Dell Computer (DELL) edged up 3/8 to 38-7/8.
Meanwhile, among the day's other newsmakers, shares of biotech firm Biogen (BGEN) plunged 8-3/16, or more than 11 percent, to 64-3/8 after the company late Thursday said blood clotting in several patients had prompted it to halt several trials for a treatment for autoimmune diseases.
And shares of Gillette (G) fell 1-7/8 to 36 after the razor maker reported third-quarter results that matched expectations, but warned fourth-quarter results will drop sharply from a year earlier; Wall Street had expected an 8 percent increase.
In the trash collecting sector, long-suffering Waste Management (WMI) crumbled in the morning but recovered later to finish the day 7/16 higher at 17-1/4. Earlier, the garbage hauler's shares tumbled when it said an internal review will result in a significant charge against third-quarter and full-year earnings.
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