U.S. tech stocks post 2nd-best weekly gain in history
(Updates to close)
By Elizabeth Lazarowitz
NEW YORK, April 12 (Reuters) - Stocks rose on Thursday, with technology shares capping their second-best week ever, as optimism about corporate earnings returned to Wall Street and fresh economic data bolstered hopes for further interest-rate cuts by the Federal Reserve.
Networking gear maker Juniper Networks Inc. (NASDAQ:JNPR) put a shine on Wall Street after it lowered its profit outlook for the year but met Wall Street expectations with a surge in quarterly earnings.
"It's an overwhelming feeling -- and it may be a wrong one -- that it can't get any worse," said Rick Meckler, a senior managing director at investment firm Liberty View, which manages $1 billion. "You can only be pessimistic for so long, and then your expectations become so low that when your reduced expectations are finally met it seems like a good thing."
The technology-laced Nasdaq Composite Index (INDEX:$COMPX) rose 62.47 points, or 3.29 percent, to end at 1,961.42, posting its first four-day rally since Sept. 1, 2000. It rose 14 percent for the holiday-shortened week, its second-best weekly performance since the market was founded in 1971, according to market research firm MarketHistory.com.
Financial markets are closed on Friday for the Good Friday holiday.
The blue-chip Dow Jones industrial average (INDEX:$INDU) climbed 113.47 points, or 1.13 percent, to 10,126.94, capping a weekly gain of 3.4 percent. The broad Standard & Poor's 500 Index (INDEX:$SPX.X) rose 17.61 points, or 1.51 percent, at 1,183.50.
The rally also was spurred by a fresh batch of economic data that showed the U.S. economy continues to slow, while prices remain tame at the producer level, underscoring anticipation the Fed will come to the rescue with more interest-rate cuts.
"Expectations of lower interest rates are superseding whatever weak profit news the market is digesting," said David Sowerby, market strategist for Loomis Sayles in Detroit.
Juniper jumped, along with other tech bellwethers like No. 1 computer chip maker Intel Corp. (NASDAQ:INTC) and software giants Microsoft Corp. (NASDAQ:MSFT) and Oracle Corp. (NASDAQ:ORCL).
High-tech shares floated higher nearly across the board, notably computer chip shares, which had soared just a day before after an analyst at a top Wall Street firm indicated the worst is over for the battered sector. The Philadelphia Stock Exchange's semiconductor index (INDEX:$SOX.X) rose nearly 6 percent.
Juniper posted a seven-fold increase in earnings on surging revenues but also warned that its 2001 earnings and revenues would fall below expectations because of the slowing economy and reduced equipment spending.
Juniper, the second most actively traded stock on the Nasdaq, surged $7.71 to $50.47 for a gain of 18 percent. Rival Cisco Systems Inc. (NASDAQ:CSCO) rose 58 cents to $17.98.
Investors, although still uncertain of where the bottom in the market lies, were testing the waters after the relentless selling that drove the Nasdaq market to a two-year low just last week, fearful of missing a major rally, analysts said.
"Managers such as ourselves are deathly afraid of missing it when the turn comes, so they want to put some money back to work, or at least not be so negative, given the downdraft we've had," said John Brorson, director of equities at Northern Trust Global Investments, which oversees $350 billion in assets.
March retail sales fell, and, in a separate report, a closely watched barometer of U.S. consumer sentiment tumbled in April, resuming a slide after a pause in March as uncertainty gripped the market and job layoffs made Americans less comfortable about their future. Weekly jobless claims that were the highest in five years also gave evidence the economy is slowing.
Investors jumped into traditional safe havens like pharmaceuticals. Among the Dow stocks, drug maker Merck & Co. (NYSE:MRK) rose $2.35 to $79.50.
The Dow got a lift from General Electric Co. (NYSE:GE), whose businesses range from power generation to financial services and broadcasting, after it posted a 16 percent rise in profits on record revenues. GE rose $1.43 to $44.70.
A drop in shares of Wal-Mart Stores (NYSE:WMT) capped the Dow's gains after the world's largest retailer said its earnings will come in below its original estimate because of cooler weather. Wal-Mart fell 53 cents to $49.70.
Some apparel retailing shares got hit hard after reporting bleak sales figures at stores open for at least a year. They included Abercrombie & Fitch (NYSE:ANF), down $3.06 at $31.93, and Children's Place (NASDAQ:PLCE), off $3.31 at $21.69.
Yahoo! Inc. (NASDAQ:YHOO) rose 19 cents to $16.05, after an early decline. After Thursday's close, the Web media giant reported a loss of $11.5 million, compared with a profit of $67.6 million a year ago, narrowly beating estimates.
Copyright 2001, Reuters News Service |
