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Nasdaq surges ahead
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March 22, 2000: 5:18 p.m. ET
Forecasting solid 1Q, investors snap up tech at the expense of Dow stocks
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - The Nasdaq composite index catapulted more than 150 points Wednesday to post its fifth-biggest point gain in history as investors snapped up the technology firms whose profits are expected to soar in the first three months of 2000.
The technology gains spread to the Standard and Poor's 500 index of large-company stocks, which jumped to its second record in two days.
But the Dow Jones industrial average fell as gains to Hewlett-Packard and Intel couldn't offset losses in many of the consumer-products makers and industrial firms that comprise the world's best-known market gauge.
"Ultimately stocks go up because of earnings growth," Drew Cupps, portfolio manager at Strong Funds, told CNNfn's market coverage.
"And that's what Nasdaq brings to the party."
Technology companies in the S&P 500 are expected to grow profits by 26.2 percent in the first quarter, outpacing the 18.4 percent gain for the overall index, according to First Call/Thomson Financial.
That divergence seemed evident Wednesday, with the tech-heavy Nasdaq surging 153.07 points, or 3.3 percent, to 4,864.75. That topped the 149.60 point jump recorded March 9 that had been the No. 5 gain in the index's 29-year history. 
"The bottom line is we're looking at first-quarter earnings that should be quite strong," Marshal Acuff, equity strategist at Salomon Smith Barney, told CNNfn's Talking Stocks. "And much of that strength is going to come from the high-tech area."
The Dow, an index of 30 blue-chip stocks, fell 40.64 to 10,866.70, hurt by so-called "old economy" stocks such as Coca-Cola, Minnesota Mining & Manufacturing, and Exxon-Mobil.
The broader S&P 500 rose 6.77 to 1,500.64, a record.
 More stocks rose than fell. Advancers on the New York Stock Exchange beat decliners 1,640 to 1,317. Trading volume topped 1 billion shares. Nasdaq winners beat losers 2,517 to 1,749. More than 1.7 billion shares changed hands.
In other markets, the dollar rose against the yen but was little changed versus the euro. Treasury securities edged higher.
Nasdaq strikes back
The Nasdaq composite index slid in recent weeks ahead of Tuesday's Federal Reserve meeting on interest rates. But that changed immediately after the Fed decision to tighten credit by a quarter point, the fifth hike in nine months.
Typically, steeper borrowing costs hurt stocks by eating into companies' earnings.
But investors apparently showed relief that the central bank lifted rates by the smallest possible increment and not the half-point some had feared.
Intel (INTC: Research, Estimates) jumped 5-5/8 to 144-1/16 and Yahoo! (YHOO: Research, Estimates) gained 5-7/16 to 197-3/16.
Biotechnology stocks also rose. Gene Logic (GLGC: Research, Estimates) surged 22-1/4 to 62 and Genome Therapeutics (GENE: Research, Estimates) climbed 10-31/32 to 35-21/32.
And Micron Technology (MU: Research, Estimates) jumped 20 to 139-1/4. Its gains came despite the chipmaker saying late Tuesday that quarterly net income was $161 million, or 58 cents per diluted share, well short of the 74 cents per share expected by analysts.
Still, at least four brokers and investment banks upgraded or raised their price target on Micron Wednesday, lifting the sector. In addition to Intel, chipmaker Applied Materials (AMAT: Research, Estimates) gained 6-3/4 to 104-3/4.
Richard McCabe, chief market analysts at Merrill Lynch, said the Nasdaq's gain makes sense, given its big sell-off earlier this month. (376K WAV) (376K AIF).
Investors look to solid 1Q
The expectations of strong first-quarter earnings, out next month, may have led influential stock strategist Abby Joseph Cohen late Tuesday to raise her target for the S&P 500 index. Cohen, co-chair of Goldman Sachs' investment policy committee, said she now expects the index to close above 1,575 in 2000, about 3 percent higher than her previous estimate.
Cohen told CNNfn that she expects the financial sector to significantly improve. (441K WAV or 441K AIFF)
But her comments were not enough to lift the Dow.
Among its biggest losers, 3M (MMM: Research, Estimates) fell 4-7/16 to 86-1/4, Coca-Cola (KO: Research, Estimates) shed 2-3/8 to 47-1/16 and Exxon-Mobil (XOM: Research, Estimates) lost 2-1/4 to 74-3/4.
In one exception, Dow member Hewlett-Packard (HWP: Research, Estimates) jumped 4-5/16 to 146-3/16.
In stocks in the news, Warner-Lambert Co. (WLA: Research, Estimates), lost 1-3/8 to 93-5/8. The drug maker was forced late Tuesday to pull its controversial diabetes drug Rezulin from the U.S. market. Other drug makers were little changed.
And in the day's biggest deal, PSINet Inc (PSIX: Research, Estimates) fell 7-15/16 to 41-9/16 after the Internet service provider agreed to buy Metamor Worldwide Inc., a technology consulting firm, for about $1.9 billion in stock.
Metamor (MMWW: Research, Estimates) surged 17-5/16, or 108 percent, to 33-5/16, making it Nasdaq's second biggest percentage gainer. 
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