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Dow eyes new highs
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March 5, 1999: 1:52 p.m. ET
Bullish report pushes blue-chip index into record land; broader market follows
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NEW YORK (CNNfn) - There was no stopping the bulls on Wall Street Friday. Stock prices continued to soar in afternoon trading as investors celebrated what they perceive to be the best possible scenario for a strong market -- solid economic growth and very, very little inflation.
Shortly before 1:30 p.m. ET the Dow Jones industrial average continued its climb into uncharted territory, rising 225.21 points, or 2.4 percent, to 9,692.61, adding to Thursday's more than 2 percent gain. Advances trounced declines 2,003 to 847 as trading volume on the New York Stock Exchange reached 521 million shares.
The Nasdaq Composite rallied 39.01 points, or 1.8 percent, to 2,331.90, in somewhat light volume following a temporary failure in the exchange's electronic trading systems. The S&P 500 index gained 24.04 points, or 1.9 percent, to 1,270.68. (Click here for a look at today's CNNfn market movers)
Bonds soared on jobs news as investors found relief for their interest-rate fears in news that wages grew a modest 0.1 percent in February, even as the economy churned out 275,000 non-farm jobs in the month. The bellwether 30-year Treasury bond surged 1-25/32 points in price, its biggest one-day gain since Oct. 5, driving the yield down to 5.57 percent.
"This morning's job report was the first sign that the strong economic growth we saw with fourth-quarter GDP has some holes in it and the economy might not be as strong as the bear suggested -- so strong, that it would lead the Fed to tighten interest rates," said Alan Hoffman, stock market strategist at Value Line Asset Management.
The dollar, however, eased from its Thursday levels against the yen and the euro, slightly hurt by the jobs data, which quashed any hopes currency investors might have had that interest rates would rise.
A broad-based rally
Bulls on Wall Street found encouragement in the jobs data and started loading up on a broad array of stocks the moment the market opened.
Technology, transportation, financial, consumer, drug, oil and utilities stocks all took off as investors saw only good news ahead -- stable interest rates, no inflation and an economy whose growth rate is the envy of the world.
Among the leading sectors, tech stocks pushed higher, once again gaining favor despite recent fears of earnings growth in the sector.
Helping prod the bulls, news that chip giant Intel (INTC) has agreed to buy Level One Communications (LEVL), a maker of high-speed chips with built-in communications features, in a $2.2 billion stock swap, sent shares of Level One soaring 17-13/16 to 44-15/16, a gain of nearly 66 percent. Level One was the most active stock and the leading net gainer on the Nasdaq. Intel's stock climbed 13/16 to 114-3/16.
Other major technology names also shot up, with Dow member IBM (IBM) rising 6-1/4 to 177-1/4 and its new partner Dell Computer (DELL) jumping 2-15/16 to 84-13/16. Dell's stock splits 2-for-1 at the close of trading Friday.
Microsoft (MSFT), which Thursday unveiled its latest aggressive plans to expand in the world of e-commerce, rose 2-1/2 to 154-3/4.
Hewlett Packard (HWP) climbed 11/16 to 68-1/8, Cisco Systems (CSCO) advanced 2-1/2 to 100-3/4, Gateway (GTW) gained 1-7/8 to 69-3/16 and Compaq (CPQ) traded 13/16 higher at 34-1/8.
Banks bank on jobs data
Meanwhile financial stocks, always sensitive to interest-rate movements, added on to a strong rally Thursday as investors breathed a sigh of relief that the cost of money is about to remain the same.
Shares of American Express (AXP) the Dow component that Thursday soared on the back of a "buy" rating from Salomon Smith Barney, advanced 3-1/2 to 116-1/2.
The Dow's two other financial components also surged, with Citigroup (C) rising 1-1/2 to 61-13/16 and J.P. Morgan (JPM) gaining 1-5/8 to 114-9/16.
Elsewhere in the market, oil stocks firmed up, adding on to solid gains from Thursday. Chevron (CHV) climbed 1-5/8 to 61-13/16 and fellow Dow 30 member Exxon (XON) climbed 2 to 69-13/16. Speculation that the Organization of Petroleum Exporting Countries might curb exports when it meets later this month also added support to the sector.
In the day's corporate news, shares of Wal-Mart (WMT) rallied 2-9/16 to 91-15/16 after late Thursday the retailer announced a 2-for-1 stock split, a 29-percent hike in its quarterly dividend and an expansion of its stock repurchase program.
News that Century Communications (CTYA) is merging with Adelphia Communications (ADLAC) sent Century's stock soaring 3-1/8 to 38-1/2. Adelphia's shares sank 2-7/8 to 54-1/4.
Left out of the party
Also taking exception to the overall market rally, shares of electronics retailer CompUSA (CPU) shed 2-1/16, or more than 25 percent, to 6-1/16 after late Thursday the company said it would post surprise losses in its fiscal third and fourth quarters.
And IDX Systems (IDXC), a provider of healthcare-information services, tumbled 10-15/16, or more than 42 percent, to 15-1/16 after it too warned that earnings for the first quarter would fall sharply below market expectations. 
-- by staff writer Malina Poshtova Zang
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