|
Nasdaq momentum continues
|
 |
December 22, 1999: 5:53 p.m. ET
Tech gains boost index to another record; blue chips, S&P end flat
By Staff Writer Jill Bebar
|
NEW YORK (CNNfn) - Defying market-correction naysayers, Y2K doomsdayers and year-end profit-takers, technology shares continued their ascent Wednesday as the Nasdaq posted its 57th record for the year.
U.S. blue chips and the broad-based S&P 500 ended firmer but showed little change as investors took some profits late in the trading session.
The Nasdaq composite rose 26.15 points to 3,937.30.
The Dow Jones industrial average added 3.06 to 11,203.60, and the S&P 500 index edged up 2.56 to 1,435.99.
Breadth was negative on the New York Stock Exchange; declines outnumbered advances 1,694 to 1,416. Trading volume reached 846 million shares.
Treasury prices were little changed, with the benchmark 30-year bond gaining 3/32 of a point in price, lowering its yield to 6.45 percent from 6.46 percent late Tuesday.
In currency markets, the dollar fell against the yen and was virtually flat against the euro.
Consumer stocks advance
The consumer sector showed strength Wednesday, led by Dow component Eastman Kodak (EK). The stock jumped 4-11/16 to 62-1/16 after the company named Robert Brust of Unisys (UIS) its new chief financial officer. Unisys fell 1-7/16 to 30-15/16.
Procter & Gamble (PG), another member of the Dow industrials, also contributed to gains. The nation’s No. 1 maker of household products rose 4-1/2 to 109.
High-flying techs recover
The Nasdaq regained its footing in afternoon trade following some profit taking in the technology sector early in the session, continuing its remarkable run. The index posted a 127.28-point gain Tuesday, the largest single-day increase in its history, and has gained a phenomenal 77 percent this year.
Bill Allyn, director of listed trading at Jefferies & Co., said the market’s recent dynamic performance is unsettling. "We’re way overbought here. It is not healthy for it to go in one direction,” he said.
Lewis Borsellino, stock market strategist at Borsellino Capital Management, a trading advisory firm, noted the participation among the tech gainers was not widespread. (917K WAV) (917K AIFF)
Many Internet issues reversed early losses. Among the bellwethers, Yahoo! (YHOO) rose 13-3/4 to 419-5/16; eBay (EBAY) advanced 5-1/8 to 149-1/2. Among the decliners was Amazon.com (AMZN), dipping 2-3/16 to 97-11/16.
The world's No. 1 Internet service provider, America Online (AOL), suffered, easing 2-1/4 to 82-3/4 after agreeing to acquire interactive map firm MapQuest.com (MQST) in a stock deal valued at approximately $1.1 billion. MapQuest plummeted 7-1/16, or nearly 22 percent, to 25-7/16.
Pressuring the Nasdaq was 3Com (COMS), plunging 4-11/16 to 48-7/16. The maker of computer networking products such as the widely used Palm electronic organizer, reported better-than-expected fiscal second-quarter profits after the market close Tuesday. However, it issued a warning regarding its fiscal third-quarter revenue.
Following the profit warning, S.G. Cowen downgraded the stock to "neutral” from "buy” and numerous Wall Street brokerage houses reduced their earnings estimates on the stock for next year and the following year. But Warburg Dillon Read raised its price target to $59 from $34.
Nasdaq component Oracle (ORCL) gained 7-3/8 to 105-1/16 amid reports of a venture between the leading developer of database management software and Boeing (BA) to create an electronic marketplace for aircraft parts. Boeing, a member of the Dow industrials, also performed well, rising 11/16 to 39-3/8.
Oracle’s competitors were mixed. Microsoft (MSFT) gained 1-11/16 to 117-9/16, but IBM (IBM) slipped 1-3/4 to 108-3/8.
Some rate hike woes post-Fed
With the Fed out of the way, economic data were again in the spotlight. Investors expressed concern about interest rates despite Tuesday’s Federal Reserve decision to keep short-term interest rates steady. The Fed also maintained its neutral bias, indicating it is likely to leave rates unchanged for a while.
U.S. gross domestic product (GDP), which measures goods and services domestically produced, rose at a 5.7 percent annual pace in the third quarter, according to the Commerce Department. The data suggested the economy expanded at a faster pace than analysts’ forecasts.
"The economy is going so strong, it increases the odds we will get a rate hike in February,” said Alan Skrainka, chief market strategist at Edward Jones.
Michael Farr, portfolio manager at Farr Miller & Washington, agreed. "The market wants to be scared. The GDP number made it even more scared today,” he said.
But Richard Cripps, chief market strategist at Legg Mason Wood Walker, was bullish in his short-term outlook for the overall market.
"The market continues to consolidate. It is highly resilient and shows no sign of weakness. I don’t see that changing,” he said.
(Click here for a look at today’s CNNfn hot stocks)
(Click here for a look at today’s CNNfn technology stocks) 
|
|
|
|
|
 |
|
