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Wall St. lifted by financials
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July 3, 2000: 2:12 p.m. ET
Stocks rise as manufacturing index weakens, easing fears of Fed action
By Staff Writer Jake Ulick
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NEW YORK (CNNfn) - Financial stocks soared Monday, lifting the Dow Jones industrial average more than 100 points, after economic data showing a surprise slowdown in manufacturing suggested to investors that borrowing costs won't go much higher.
The National Association of Purchasing Management said its index of manufacturing activity slipped last month, defying expectations for a nearly flat reading. In a shortened pre-holiday trading session, investors cheered the possibility that the slowdown, coupled with other evidence, might keep the Federal Reserve from raising interest rates next month. Higher rates typically hurt corporate earnings.
"All the recent data are sending signals that the Fed doesn't need to raise rates anymore," said Charles Payne, head analyst at Wall Street Strategies
J.P. Morgan and Citgroup, ever sensitive to higher interest rates, surged.
 The Nasdaq composite index also rose, as gains in Yahoo! and JDS Uniphase offset loses to Oracle. Monday's was the first trading session of the third quarter.
After struggling in the first half of the year, the Dow rose 112.78, points, or 1 percent, to 10,560.67, building on its 49.85-point run-up in the previous session. The Nasdaq rose 25.65 to 3,991.76 while the S&P 500 jumped 14.73 to 1,469.33.
"If we get this trend and in fact we're seeing a soft landing to the economy we are going to get a summer rally," Payne said.
Still, Payne said any gains in the rest of the week will be tempered ahead of Friday's closely watched jobs report for June
More stocks rose than fell. Advancing issues on the New York Stock Exchange topped declining ones 1,973 to 808 on volume of 445 million shares. Nasdaq winners topped losers 1,978 to 1,767 as more than 596 million shares changed hands.
 The light volume comes as many traders took a four-day weekend. The market closed at 1 p.m. ET Monday, ahead of Tuesday's July 4 full close.
In other markets, Treasury securities edged higher. The dollar rose against the euro but fell versus the yen.
Wall St. begins second half
Wall Street began the third quarter Monday after a tough first half of the year. All the major stock indexes fell during the first six months of 2000 and many analysts see stocks struggling until the market gets a handle on whether the Federal Reserve is done raising interest rates.
Still, the day's economic data caused some investors to bet that end may already be here, boosting the outlook for corporate profitability.
"Although manufacturing activity is still expanding, momentum in the manufacturing sector has clearly faded," said Steven Wood, economist a Bank of America. "This report confirms that the FOMC was correct in pausing their tightening cycle at last week's meeting."
The NAPM index fell to 51.8 percent, below the 53.0 reading expected by economists polled by Briefing.com, and 53.2 a month before.
 Lifting the Dow, J.P. Morgan (JPM: Research, Estimates) surged 5-5/8 to 115-3/4 and Citigroup (C: Research, Estimates) gained 2-3/16 to 62-7/16.
In technology stocks, Yahoo! (YHOO: Research, Estimates) jumped 4 to 127-7/8 while JDS Uniphase (JDSU: Research, Estimates) gained 8-5/16 to 128-3/16.
Keeping the Nasdaq's gains in check, Oracle Corp. (ORCL: Research, Estimates) tumbled 3-7/8 to 80-3/16. The maker of data base software announced Friday that president and chief operating officer Ray Lane had resigned.
Informix falters
Already, dozens of companies have warned their second-quarter earnings will miss Wall Street expectations under the weight of the Fed's six credit tightenings in a year. Analysts fret more disappointments could be on the way.
In the latest, Informix Corp. (IFMX: Research, Estimates), an Internet and e-commerce software maker, warned Monday that its second-quarter earnings will come in at about 2 cents a share, well below the 12 cents a share expected by analysts. Investors hammered the stock, sending it down 2-3/4 to 4-11/16.
 But Sprint rallied. The surge came after the latest media reports said Deutsche Telekom AG is in serious talks to buy the No. 3 U.S. long-distance provider. Deutsche Telecom (DT: Research, Estimates) American depository receipts, or ADRs, fell 15/16 to 55-13/16 while shares of Sprint (FON: Research, Estimates) jumped 3-7/16 to 54-7/16. Sprint's possible availability as an acquisition target comes a week after the federal government filled suit to block WorldCom's purchase of Sprint. Worldcom (WCOM: Research, Estimates) fell 3/4 to 45-1/8.
Mexican stocks, meanwhile, rose after the country elected Vicente Fox as president, ending the ruling party's 71-year reign. ADRs of Telefonos de Mexico (TMX: Research, Estimates) surged 5-11/16 to 62-7/8, and ADRs Grupo Televisa (TV: Research, Estimates) added 5-5/8 to 74-9/16. 
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