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Nasdaq speeds ahead
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November 24, 1999: 5:42 p.m. ET
Techs regain momentum, trigger broad-based gains in pre-holiday trade
By Staff Writer Jill Bebar
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NEW YORK (CNNfn) - U.S. stocks rebounded Wednesday, with the Nasdaq charging ahead to another record close. Gains to technology and telecom shares led the upward movement amid higher-than-expected volume ahead of the Thanksgiving holiday.
The Nasdaq composite rallied 77.62 points, or 2.3 percent, to 3,420.49, its 15th record close in 19 sessions.
The Dow Jones industrial average rose 12.54 points to 11,008.17, and the S&P 500 index advanced 12.44 points to 1,417.08.
However, breadth on the New York Stock Exchange remained negative with losers beating gainers 1,632 to 1,384 as trading volume reached a moderate 735 million shares.
Treasury prices fell in an abbreviated session on the eve of the Thanksgiving holiday. The benchmark 30-year bond lost 9/32 of a point in price, raising its yield to 6.21 percent from 6.19 percent late Tuesday.
The dollar rose against both the yen and the euro.
Tech momentum returns
Investors' appetite for technology shares continued with the Nasdaq shaking off Tuesday's losses. The index was bolstered by sharp gains in Internet issues.
"The Nasdaq clearly has a positive tone. It's got momentum players back in a big way, going in and out of these stocks at regularly rising prices," said Joseph Battipaglia, chief investment strategist at Gruntal & Co.
Alan Ackerman, senior vice president at Fahnestock & Co., said many market players used Tuesday's pause to position themselves with bargain basement technology issues.
"The market itself turned around. Mood, momentum and money flow are still positive," Ackerman said. The market "is reacting to a sense of investors not wanting to miss the train."
Top Internet performers included Amazon.com (AMZN), rising 5-1/2 to 87-1/4, Yahoo! (YHOO), gaining 9-13/16 to 231 and EBAY (EBAY), climbing 11-15/16 to 179-1/2.
Further lifting the Nasdaq was Intuit (INTU), surging 6-5/16, or more than 14 percent, to 50-3/8, after the No. 1 maker of personal-finance software reported a pro-forma loss late Tuesday for its fiscal first quarter that was narrower than expected.
However, Novell (NOVL) failed to lure buyers. The network-software maker stumbled 15/16 to 21-1/16 after reporting fiscal fourth-quarter earnings late Tuesday that were in line with expectations. But the company warned analysts that its next quarter could be adversely affected by Y2K problems. Following the earnings report, Morgan Stanley Dean Witter downgraded the stock to "neutral" from "outperform."
Also suffering was Dow component International Business Machines (IBM), weighing on the blue chips amid speculation over its accounting methods. A report in the Wall Street Journal Wednesday raised questions about the world's largest computer maker's treatment of one-time gains. The stock fell 1-31/32 to 104-1/16.
A strong performance in the telecom sector also contributed to gains. AT&T (T) provided support to the Dow. The nation's largest long-distance phone company advanced 2-7/16 to 53-3/16 after reports said it will issue a tracking stock for its wireless-telephone business.
Other gainers were MCI Worldcom (WCOM), rising 1-11/16 to 88-3/4, and Bell Atlantic (BEL), adding 1/4 to 62-1/8.
Investors discount strong economic news
Investors shrugged off stronger-than-expected economic data, which rekindled concern about interest rates early in the session. Preliminary third-quarter gross domestic product was revised upward to a 5.5 percent annual growth rate from 4.8 percent, higher than analysts' expectations of 5.0 percent. The stronger-than-expected number, measuring goods and services domestically produced, heightened investors' fears that the Federal Reserve may hike interest rates in the foreseeable future.
Also released Wednesday was the weekly report on initial claims for unemployment compensation, which declined to 274,000 in the week ended Nov. 20 from 287,000 in the prior week. The Labor Department data signaled continuing strength in the job market, which also raised inflation fears.
Analyst Richard Stein saw no reason for concern about the latest data. Stein, chief technical analyst at Noble Financial, a regional money manager based in Boca Raton, Fla., said the market looks "bright" and faces no real obstacles in the near term.
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