Closing Stock Market Commentary : brought to you by Larry Wachtel of Prudential Securities
December 2, 1999, 4:58 p.m. EST
Given up as fatally flawed on Tuesday, high tech left them laughing today as the NASDAQ Index scored its fifth biggest point gain, rising 98 points to a new all time high. Everything in tech land worked, the chips, the chip equipment, the telecoms, the software, the boxes and for added flavor the biotechs. It's as if the Tuesday shakeout never existed. The Dow Industrial Average got dragged up by the techie crowd with Hewlett Packard and IBM the main contributors of a 40 point advance. Gainers and Loser were in balance with big board volume approaching 900 million shares while NASDAQ exceeded 1.2 billion.
All of this good stuff was taking place against a hesitant interest rate environment. The long bond fell back sending the yield up three basis points to 6.32%, needless to say the bond crowd was tentative ahead of the blockbuster job figures tomorrow morning, but the high tech crowd was the picture on nonchalance.
Seasonalities are starting to kick in as the rush of money that usually shows up at year end begins to make its appearance. There is also 1.5 trillion parked in money market mutual funds waiting for an entry point. It would seem that entry point arrived for some today.
Bucking the uptrend were the retailers which declined after same store sales rose less than expected, four percent in November as a last minute shopping spree over the Thanksgiving weekend failed to makeup for slow sales of winter clothier for the month.
Among the Dow 30 gains in Hewlett Packard, Alcoa, #M Corp, IBM and Intl Paper offset losses in Johnson& Johnson, Boeing, Wal-Mart, McDonald's and Eastman Kodak. On the calendar today, October new home sales rose 16% from the prior month and well above expectations, underscoring again the robust nature of the economy. As for the job figures tomorrow consensus calls for 225,000 new jobs against 310,000 the prior month with unemployment static at 4.1% and wage inflation creeping up slightly to a 0.3% rise.
Worldwide was the big point gainer rising 32 after a joint venture with America On Line. ADC Telecom gained 9 points on better than expected results. Favorable earnings helped JD Edwards and Catalina Marketing while negative results impacted Eclipse Surgical, Galileo Intl, Baker Hughes, SFX Entertainment and Finish Line.
Disappointing November sales figures hurt Gap stores, JC Penney and TJX CORP. First Sterling rose 3 after agreeing to merge with Main Street Banks while Ben & Jerry's rose 3 after receiving buy out indications of interest.
Needless to say, the job numbers tomorrow morning will influence proceedings but we wonder what will stop the high tech love affair. They say Santa is using palm pilot.
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Ibexx
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