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Nasdaq charges ahead
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November 11, 1999: 5:39 p.m. ET
Index rallies to another record close but blue chips wither on rate-hike jitters
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - Gains in technology shares fueled the Nasdaq to another record close Thursday amid heavy volume. However, investors took profits from wobbly Dow industrials as interest rate jitters pressured the index.
The Nasdaq composite advanced 41.33 points, or 1.3 percent, to 3,197.29, its ninth record close in 10 sessions.
The Dow Jones industrial average slipped 2.44 points to 10,595.30, while the S&P 500 index rose 8.00 points to 1,381.46. On the New York Stock Exchange, declines outnumbered advances 1,711 to 1,263 as trading volume reached 883 million shares.
The bond market was closed for the Veterans Day holiday. The benchmark 30-year Treasury bond yield was at 6.08 percent late Wednesday.
The dollar, trading within a narrow range, rose against both the yen and the euro.
With a monetary policy meeting scheduled next Tuesday, analysts said it was a close call whether the Federal Reserve will hike short-term interest rates.
"People are being careful at the moment. They don't know what is going to happen," said Harry Laubscher, market analyst at Tucker Anthony.
Peter Canelo, U.S. investment strategist at Morgan Stanley Dean Witter, expects the market to take a "pause" heading into the meeting.
Technology strength continues
As the technology sector continues to be the dominant force in the market, analysts expect the Nasdaq to push further into uncharted territory.
"Technology is the driver here. The strength will continue, and this rally will take us to new highs," Canelo said.
Adanced Micro Devices (AMD) soared 5-1/16, or 22 percent, to 28-1/16 late in the session after the chip maker said it expected to break even in the fourth-quarter. The announcement soothed investors fears that the company would post a loss.
Cisco Systems (CSCO) continued to firm, adding 4-1/4 to 83-3/4 after reporting strong earnings late Tuesday. The largest maker of computer networking equipment announced an agreement Thursday to buy V-Bits, a leading provider of digital video services for cable television service providers, for $128 million in stock.
Market participants eyed Dell Computer (DELL). The No. 1 personal computer maker reported third-quarter earnings after the market close of 18 cents a share, excluding an acquisition charge, on the money with expectations. Its revenues increased 41 percent to $6.78 billion.
The stock rose 2 to 43-7/16 during regular trading hours and edged down to 43-1/4 in after-hours trade, according to Instinet. Dell recently warned its earnings would be hurt due to rising prices of memory chips.
Microsoft (MSFT) advanced 2-1/2 to 89-5/8, rebounding from its recent decline after a U.S. judge late Friday issued tough findings of fact against the company. The world's largest software company signed a five-year agreement Thursday to create a "store within a store" in up to 7,000 RadioShack U.S. retail outlets.
RadioShack, the retail arm of Tandy Corp. (TAN), will provide demonstrations of and offer subscriptions for Microsoft's MSN Internet service. As part of the deal, Microsoft will make a $100 million equity investment in the newly launched RadioShack.com to help build its e-commerce offerings.
In addition, Tandy said Thursday it planned an eventual initial public offering for RadioShack.com. Tandy jumped 6-1/4, or nearly 10 percent, to 71-7/16.
Microsoft's online travel unit, Expedia (EXPE) climbed further, trading up 2-9/16 to 56 following its initial public offering Wednesday.
In corporate news, Bank One (ONE), the jumbo regional bank and the nation's largest issuer of credit cards, reversed early losses to close unchanged at 34-5/8 after it warned late Wednesday its 1999 operating earnings will fall as much as 14 cents per share below analysts' expectations due to softness at its First USA credit card subsidiary.
On the heels of the warning, Merrill Lynch cut the stock to "long-term accumulate" from "buy."
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