Nasdaq hits five-year highs
Tech-fueled index closes at highest point since February 2001 as part of a broad, post-Fed rally on Wall Street.
NEW YORK (CNNMoney.com) - Stocks surged Wednesday, sending the Nasdaq to its highest close in five years, as investors jumped back into the market after the previous session's Federal Reserve-influenced selloff.
The Nasdaq composite (up 33.32 to 2,337.78, Charts) jumped nearly 1.5 percent, closing at its highest level since February 2001.
Treasury prices slipped, raising long-term bond yields, and the dollar gained versus other major currencies. Oil and gold prices rose.
"We had a silly selloff yesterday predicated on some fabricated surprise from our new Fed chair," said Art Hogan, chief market analyst at Jefferies & Co. "So today, we're seeing across-the-board bargain-hunting, with the Nasdaq a bit ahead of the other two indexes."
As of 5:45 p.m. ET, Nasdaq and S&P futures pointed to a flat open for stocks Thursday when fair value is taken into account.
However, that is likely to change before the open Thursday, with the final read on fourth-quarter gross domestic product growth due before the start of trade. The weekly jobless claims read is also due Thursday morning.
Google is likely to be active Thursday. After the close Wednesday, it was revealed that the Internet behemoth has filed with regulators to periodically sell up to 5.3 million shares of stock. Shares of Google (Research) fell 3 percent in extended-hours trading.
Best Buy (Research) is expected to report earnings Thursday morning. The electronics retailer likely earned $1.29 per share, according to analysts surveyed by Reuters. Best Buy earned $1.03 a year ago.
Reconsidering the Fed?
On Tuesday, the Fed raised its key short-term interest rate target a quarter-percentage point to 4.75 percent, as expected, and implied in its statement that more rate increases may be needed to keep inflation from picking up.
That sent stocks tumbling along with Treasury bond prices, as investors also kept an eye on surging oil prices.
But the tone was more positive Wednesday as investors considered the fact that the Fed statement was pretty positive overall and showed little change from the January statement, Hogan said.
"I think people were surprised by the bluntness of the commentary yesterday, as it sounded more hawkish than it was," said Barry Hyman, equity strategist at Ehrenkrantz King Nussbaum. "I thought it would take a few days for the market to get used to it, but it clearly happened much faster."
He said that worries are still in place about the threat of inflation and the possibility of the Fed "overshooting" or raising rates so much that it starts to slow the economy.
However, those are "second-half worries," Hyman said. For now, "if you believe the growth story in the economy, you have to believe the growth story in stocks. We're seeing that today."
Gains were broad based, with 23 out of 30 Dow issues rising.
Components Alcoa (up $0.54 to $30.71, Research), Boeing (up $1.67 to $79.18, Research), Walt Disney (up $0.77 to $27.86, Research) and Verizon Communications (up $0.47 to $35.02, Research) also snapped back soundly.
A variety of other technology shares gained too.
Sun was one of many stocks boosting the Goldman Sachs Hardware (Charts) index by 2.8 percent.
Among other movers, oil stocks rose, lifting the Amex Oil (up 12.28 to 1,080.42, Charts) index by 1.2 percent.
A number of other brokerages rose as well, lifting the Amex Securities Broker/Dealer (Charts) index by 2.1 percent.
GM slides on GMAC concerns
On the downside, General Motors (down $0.60 to $22.15, Research) sank 2.6 percent. The troubled automaker said late Tuesday that it would restate almost four years of results for its GMAC finance unit and that this could hurt its chances of selling the unit.
On Wednesday, ratings agency Standard & Poor's said it was considering whether to cut GM's debt rating.
Accenture (down $1.79 to $29.11, Research) slipped almost 6 percent in active New York Stock Exchange trade. The consulting firm reported a drop in quarterly profit late Tuesday, due to a pre-tax provision it took related to contracts with the UK's National Health Service.
Market breadth was positive. On the New York Stock Exchange, winners beat losers around eight to three on volume of 1.57 billion shares. On the Nasdaq, advancers topped decliners eleven to five on volume of 2.42 billion shares.
Treasury prices fell, raising the yield on the benchmark 10-year note to 4.80 percent from 4.78 percent late Tuesday. Treasury prices and yields move in opposite directions.
The dollar gained versus other major currencies.
COMEX gold for May delivery added $6.40 to settle at $576 an ounce.
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