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Nasdaq hurdles 4,000
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August 23, 2000: 4:43 p.m. ET
Investors cheer chip stocks, led by Intel; Dow industrials edge higher
By Staff Writer Catherine Tymkiw
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NEW YORK (CNNfn) - The Nasdaq composite index breached the 4,000 mark for the first time in four weeks Wednesday as investors continued to pour money into chip stocks, led by Intel and Applied Materials.
The Nasdaq gained 52.80, or more than 1 percent, to 4,011.01.
 Meanwhile, the Dow Jones industrial average straddled breakeven amid confusion about the Federal Reserve's next move on interest rates in the wake of surging oil prices. The Dow industrials rose a modest 5.50 to 11,144.65 while the S&P 500 advanced 7.84 to 1,505.97.
The bewilderment came just one day after the Fed's policy-making body left interest rates unchanged. Intel and ExxonMobil propped the Dow but selling pressure from J.P. Morgan kept a lid on the gains.
 "There's a continued choppiness coming from yesterday's meeting; it's really a trading environment instead of an investing environment," said Larry Rice, chief strategist at Josephthal & Co. "Action has been dominated by stories in individual stocks but, to me, it's just continuing the trend of more money chasing few names."
And Bill Danzell of Danzell Investment Management told CNNfn's market coverage that stocks are now going through a consolidation period that could result in a holiday season breakout. (415K AIFF) (415K WAV)
Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 1,501 to 1,294 as more than 911 million shares changed hands. On the Nasdaq, losers outpaced winners 2,003 to 1,950 as more than 1.4 billion shares were traded.
In currencies, the dollar fell against both the yen and the euro. Treasurys ended higher.
Chips lead techs higher
Boosting semiconductors were positive comments by Donaldson Lufkin Jenrette about the entire sector outlook. The analysts said the book-to-bill ratio was falling within expectations with shipments outpacing bookings.
Book-to-bill is the ratio of orders booked for future delivery to orders being immediately shipped. It is indicative of the pace at which orders for chips are rising or falling on a monthly basis.
PMC Sierra (PMCS: Research, Estimates) rose 8-13/16 to 234-1/8, Applied Materials (AMAT: Research, Estimates) jumped 3-7/16 to 85-7/16, and Altera (ALTR: Research, Estimates) gained 2-13/16 to 64-7/16.
Analysts also were upbeat about Intel (INTC: Research, Estimates). Credit Suisse maintained a "strong buy" rating and $100 price target after the world's No. 1 chip maker debuted its new desktop microprocessor, the Pentium 4. Intel rose for the tenth straight session, gaining 2-1/2 to 74-5/8.
 In tech news, Intuit (INTU: Research, Estimates) gained 8-9/16 to 54-5/8 after the maker of Quicken and TurboTax personal finance software reported a fourth-quarter loss from operations that was narrower than forecast, but profits rose 35 percent for the entire fiscal year.
And analysts were pleased. Credit Suisse First Boston sharply raised its fiscal year 2001 revenue estimate for Intuit by 11 percent to $1.30 billion from $1.18 billion. It also hiked its operating earnings per share estimates to 82 cents from 66 cents.
Earlier this week, Lehman Brothers lifted the company's earnings per share estimates for both fiscal 2000 and 20001.
More news from CNNfn.com for investors:
· Unsexy stocks refind zip
· Ten tech musts to keep
· Special Report: The Road to Riches
But CBS owner Viacom (VIA: Research, Estimates) fell 3/4 to 66-3/4 as the network's blockbuster summer hit, "Survivor" finally reveals who is the ultimate survivor and recipient of $1 million.
Investors eye rising oil prices
Analysts said investors should be wary about the recent spike in oil prices, compounded by the inventory shortfall.
"You've got the Fed meeting out of the way but you have higher oil prices, which is impacting the transportation average today," said Josephthal's Rice. "As far as oil is concerned, you're coming into the heating oil season and inventories are down. I think that weighed upon (Fed chairman) Greenspan's cautionary bias."
Crude oil prices for October delivery surged $1.33 to $32.55 on the New York Mercantile Exchange after President Clinton said he would talk to Nigerian President Olusegun Obasanjo about OPEC production levels. According to the American Petroleum Institute, U.S. oil stocks have fallen to 279.7 million barrels and now hover just above a 24-year low.
But oil stocks benefited from the surging prices.
The Dow's biggest gainer, Exxon Mobil (XOM: Research, Estimates), rose 1-7/16 to 84-9/16. Other oil issues joined in the advance: Chevron (CHV: Research, Estimates) rose 1-9/16 to 88-3/16 and Texaco (TX: Research, Estimates) surged 1-13/16 to 54.
Albertson's slips
Grocer Albertson's (ABS: Research, Estimates) slid 3-3/4 to 22-11/16 after it warned investors that its fiscal second quarter and fiscal year results will miss expectations due to weak sales and higher-than-expected expenses. The company said earnings excluding special items will come in about 50 cents a share for the quarter ended Aug. 3, about 20 percent less than the consensus forecast of 62 cents a share.
 Albertson's woes spread to other grocery issues. Safeway (SWY: Research, Estimates) dropped 1 to 51 and Kroger (KR: Research, Estimates) skidded 13/16 to 22-3/16. 
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