NEW YORK (CNNfn) - The Nasdaq composite index surged more than 2 percent Thursday, attracting bargain hunters after two days of selling shaved 5 percent off the tech-heavy index.
But DuPont and J.P. Morgan helped propel the Dow Jones industrial average lower as investors rotated out of blue chips.
 "We're just keeping some pressure on the more cyclical stocks which is adding to upside on the technology front," said Bill Meehan, chief market analyst at Cantor Fitzgerald. "I suspect the recent beatings which have been somewhat controversial, in the sense that analysts are tugging in different directions, led some folks to decide to step into the fray. But it's just a lot of rotation."
The Nasdaq gained 85.00 to 4,098.34. The Dow industrials fell 50.77 to 11,259.87, while the S&P 500 advanced 10.16 to 1,502.41.
 Market breadth was mixed. On the New York Stock Exchange, decliners beat advancers 1,282 to 1,524, as more than 976 million shares changed hands. On the Nasdaq, winners outpaced losers 2,260 to 1,734, as more than 1.6 billion shares were traded.
In currencies, the dollar was little changed against the euro but weaker versus the yen. Treasury securities were mostly lower.
Money pours back into techs
After taking a two-day beating related to analyst downgrades, chipmakers bounced back. Intel (INTC: Research, Estimates) rose $1.75 to $67.44, and PMC Sierra (PMCS: Research, Estimates) gained $8.06 to $225.13.
More news from CNNfn.com for investors:
· Choosing an IRA or 401(k)
· Why O.J. may pay
· Langan: No fan of chips
The Nasdaq attracted buyers after Nextel Communications (NXTL: Research, Estimates) was reported by the Wall Street Journal to be considered as a strategic partner by AT&T Wireless (AWE: Research, Estimates). Nextel shares rose $2.94 to $53, while AT&T Wireless slid 50 cents to $25.
The gain was aided by a research note from Credit Suisse First Boston analyst Charlie Galvin, who reiterated his "strong buy" rating on Nextel shares after company management made remarks during CSFB's technology conference in Santa Barbara, Calif.
"We're getting an oversold bounce. Telecoms are getting a boost because of the AT&T Wireless (news)," said Art Hogan, chief market analyst at Jefferies & Co. "Investors are going to buy those tech stocks that we're not necessarily worried about."
DuPont, J.P. Morgan sour Dow
One analyst pinned the shift from blue chips to technology on a continued rotational move, sparked by specific corporate news.
"It is an almost everyday affair where one or two stocks impact the averages (based on individual news)," said Larry Rice, chief investment strategist at Josephthal & Co. "Every time you get these swings, it's based on individual stories or a downdraft in a group."
 Pressuring the Dow, DuPont (DD: Research, Estimates) fell $5.19 to $41.81 after it said that higher-than-anticipated energy and raw material costs would cause it to miss full-year earnings estimates.
Mary Farrell, investment strategist at PaineWebber, told CNNfn's market coverage that investors keep shifting sectors as they try to sort out the results outlook for the quarter ending this month. (361K WAV) (361K AIFF).
Other analysts said the DuPont news was not unexpected in light of ongoing spikes in oil prices, which have a direct impact on chemical makers.
"DuPont is the first of the Dow components to warn that things are not that enticing and, indeed, energy prices do mean something," said Cantor Fitzgerald's Meehan.
Also hurting the blue chips were some recent gainers. After surging amid takeover speculation on Wednesday, Dow component J.P. Morgan (JPM: Research, Estimates) fell $5 Thursday to $163.
No yeehah! for Yahoo!
Yahoo! (YHOO: Research, Estimates) tumbled $5.13 to $106.94, after CEO Tim Koogle told an investor conference in San Francisco that tightening in the Internet advertising market "takes a little of the upside away in the near term."
Lehman analyst Holly Becker maintained her "neutral" rating on Yahoo, saying she believes the company has "significant near-term flexibility with respect to its reported numbers" -- even though there is concern that the online advertising market is slowing.
 MP3.com (MPPP: Research, Estimates) fell $1.69 to $6.19 after a federal judge ordered the online music firm to pay as much as $250 million in damages to Universal Music Group for copyright infringement.
UAL (UAL: Research, Estimates) fell 75 cents to $47 after Merrill Lynch lowered its third-quarter earnings estimates for the parent of United Airlines to 30 cents a share from $2. 
|
