graphic
Markets & Stocks
Record rally for Wall St.
September 8, 1998: 6:01 p.m. ET

Dow climbs record 380 points, Nasdaq gains 94 as rate cut hopes lure buyers
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - It took severe crises in several countries to knock down Wall Street in last week's sell-off. And it took the vague words of one man to bring the market soaring back Tuesday, with both the Dow industrials and the Nasdaq posting record one-day gains and moving back into the plus column for the year.
     Words from Alan Greenspan after market close Friday stirred hopes that the Federal Reserve would ease interest rates before too long and woke up Wall Street's sleeping bulls, driving hordes of buyers back into the battered market after a three-day holiday weekend.
     The Dow Jones industrial average surged 380.53 points, or 4.98 percent, to 8,020.78, its biggest one-day point gain in history, which also moved the index into positive territory for the year. The Dow ended 1997 at 7,908.25 and dropped below that level in last week's meltdown. After Tuesday's rally, the blue chip index holds a gain of 1.42 percent for the year.
     The Nasdaq Composite roared 94.34 points ahead, or 6.02 percent, to 1,660.86, setting its largest daily point gain and moving up 5.76 percent on the year.
     The broad S&P 500 index rallied 49.57, or 5.09 percent, to 1,023.46. The Russell 2000 index of small-cap stocks climbed 14.86, or 4.28 percent, to 361.93. The Dow transports index rose 132.55, or 5.07 percent, to 2,749.30. All three set record one-day point gains.
     On the New York Stock Exchange, advances trounced declines 2,509 to 616 on heavy volume of 819 million shares. The rally pumped $465 billion in market capitalization back into the market, helping to offset a substantial chunk last month's losses.
     Wall Street's rally came as the market got its first opportunity to react to a late Friday speech by Fed Chairman Greenspan, which many investors interpreted as suggesting the Fed might lower interest rates before too long.
     Speaking about the impact of the global economic turmoil on U.S. growth, Greenspan said the U.S. economy would not remain unscathed while the rest of the world is facing a slowdown. He also said the Federal Open Market Committee, the Fed's policy-making body, would have to consider carefully all the developments since the Fed's last policy meeting in August. This statement led many market watchers to believe that the Fed would be open to the possibility of easing interest rates. The FOMC's next meeting is scheduled for Sept. 29.
     Greenspan's words and the market's powerful surge opened the door for Wall Street bulls, who had been silenced in the past few weeks as the Dow fell more than 18 percent from its all-time high in July.
     "Our economy is doing well despite what is going on in Asia, and with any signs of improvement from there, it could be up, up and away for us," said Al Goldman, chief market strategist at A.G. Edwards, who sees the Dow reaching 10,000 around the first quarter of 1999.
     But Marshall Acuff, equity strategist at Salomon Smith Barney, sounded a more cautious note. He called Tuesday's rally an overreaction to the upside by a market that last week overreacted to the downside. Acuff warned interest rates may not be coming down as fast as some investors expect and pointed to a likely slowdown in corporate earnings growth, which could prove bigger than anticipated. (415K WAV) or (415K AIFF)
     The stock market's robust rally sapped the strength out of bonds, driving the benchmark 30-year Treasury bond down 1-1/32 points in price and raising its yield to 5.35 percent.
     The dollar bounced around in narrow trading ranges against the German mark and the Japanese yen as investors weighed the positive impact of the rally in stocks against the potential negative impact of a possible interest rate cut.
    
Techs, banks flying high

     In stocks, once again technology and banking shares led the way. The two high-profile sectors suffered the worst losses in the market's tumbles of the past two weeks, and were quick to soar ahead of the crowd in Tuesday's comeback.
     Both sectors have relatively high exposure to international markets, and their earnings have suffered because of the Asian, Russian and emerging markets crises. But stronger markets overseas are likely to mean better business for technology powerhouses and lower interest rates at home would boost the banks' performance.
     Among the leaders, Dell Computer (DELL), whose shares split 2-for-1 at the market close Friday, surged 5-3/16 to 59-15/16, Microsoft (MSFT) jumped 5-11/16 to 101-31/32 and Intel (INTC) rallied 3-21/32 to 81-29/32. Dow member IBM (IBM) climbed 6-1/2 to 125-7/8.
     Among the financial components of the Dow industrials, J.P. Morgan (JPM) surged 3-9/16 to 90-1/2, Travelers (TRV) climbed 3-1/8 to 42-3/16, and American Express (AXP) leaped 6-3/8 to 80. Other financial gainers included Citicorp (CCI), rising 6-3/16 to 98-11/16 and Chase Manhattan (CMB), climbing 1-3/4 to 47-1/8.
     Brokerage stocks also joined the party, with Morgan Stanley Dean Witter (MWD) rising 4-3/8 to 54-5/8, Lehman Brothers (LEH) climbing 4-13/16 to 42-7/8 and Merrill Lynch (MER) surging 4-5/16 to 66.
     Finally, Internet shares, among the market's most-volatile performers and also a sector that was hard hit in the sell off of the last two weeks, rebounded with a vengeance. Search engine Yahoo! (YHOO) rallied 9-1/4 to 84-5/8. Rival Excite (XCIT) soared 4-1/8 to 30 and Infoseek (SEEK) jumped 3-7/8 to 21. Online service provider America Online (AOL) gained 9-1/4 to 95-1/4 and online book retailer Amazon.com (AMZN) rose 6 to 92-1/4.
     (Click here for a look at today's CNNfn market movers.) Back to top
     -- by staff writer Malina Poshtova Zang

  RELATED STORIES

U.S. stock markets

How other markets in the Americas performed today

  RELATED SITES

View the latest market update via Netshow

See how your mutual funds are doing

Learn online trading in Final Bell

Need investing advice? Try Quicken.com on fn


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.