Nasdaq Rises as U.S. Stocks Have Biggest Monthly Gain Since '91
By Robert Dieterich - 04/30 17:18
New York, April 30 (Bloomberg) -- The Nasdaq Composite Index rose for the third
time in four sessions as U.S. stocks finished their best month in almost a
decade.
Cisco Systems Inc., JDS Uniphase Corp. and Ciena Corp. gained, lifting the
Nasdaq 40.56, or 2 percent, to 2116.24. The Wilshire 5000 Total Market Index,
the broadest gauge of U.S. shares, advanced 8.1 percent in April, its biggest
monthly climb since December 1991. It eked out a gain of 3.51 to 11,512.35
today.
As investors have grown more confident that the economy won't fall into a
recession, ``that helps the Nasdaq'' the most because it had fallen farthest, said
Henry Cavanna, who helps manage $24 billion at J.P. Morgan Fleming Asset
Management. ``When we look back a year from now we probably will see that we
bottomed around this time.''
Declines in General Electric Co., Citigroup Inc. and Oracle Corp. wiped out a 1.3
percent gain in the Standard & Poor's 500 Index, which lost 3.59, or 0.3 percent,
to 1249.46. The Dow Jones Industrial Average fell 75.08, or 0.7 percent, to
10,734.97.
For the month, the Nasdaq gained 15 percent. It is still down 58 percent from its
March 10, 2000 high. The S&P 500 rose 7.7 percent for the month and the Dow
advanced 8.7 percent.
More than three stocks rose for every two that fell on the Nasdaq Stock Market,
while five advanced for every four that declined on the New York Stock Exchange.
Some 1.2 billion shares traded on the Big Board, in line with the three-month
daily average.
`Not Worried'
The Nasdaq rallied Friday after the government said the economy grew at a 2
percent annual rate in the first quarter, up from the fourth quarter and faster than
most economists predicted.
The gross domestic product data and the Federal Reserve's surprise half-point
interest-rate cut earlier this month reassured investors that the economy isn't
slipping into a recession, Cavanna said.
``We're not worried now that the Fed isn't going to do what it needs to do to get
the economy going,'' said Cavanna, who has added stocks to the portfolios he
manages over the past 30 days and cut his cash holdings.
A Commerce Department report today showing U.S. personal spending rose
more than expected in March may have helped boost investor optimism about
the economy. Also, an index of manufacturing activity in the Chicago area
rebounded in April from a 19-year low in March.
Networking Shares Rise
Cisco advanced $1.38 to $16.98. Other makers of networking equipment also
rose: Juniper Networks Inc. gained $4.01 to $59.03 and Ciena Corp. advanced
$4.77 to $55.06.
The Goldman Sachs Multimedia Networking Index rose 4 percent, led by Cisco,
Juniper and JDS Uniphase, the biggest maker of parts used in fiber-optic
equipment, which climbed $2.12 to $21.38.
Eli Lilly & Co. rose $2.20 to $85. Barron's reported the drugmaker plans to
market 10 new drugs in the next four years, boosting profit even after patent
protection expires on its antidepressant Prozac in August.
The new products include Zovant for sepsis, an infection that affects 1.5 million
people a year, and Cialis for sexual dysfunction, Barron's said.
McKesson HBOC Inc., the second-biggest U.S. drug wholesaler, rose $3.63 to
$30.84. McKesson said profit in its fiscal fourth- quarter, ended in March, rose
more than expected as pharmacies bought more medicines and it cut costs.
Cooper Cameron Corp. rose $3.44 to $63.06. The maker of oil and gas pipeline
equipment said it expects profit this year to beat forecasts by as much as 13
percent. The company also reported first-quarter earnings that beat analysts'
estimates.
Other oilfield equipment and service companies also rose: BJ Services Co.
gained $1.80 to $82.25, and Smith International Inc. advanced $1.39 to $81.19.
Oracle Falls
Oracle, the No. 2 independent software maker, fell 99 cents to $16.16 and was
the most active U.S. stock with more than 92 million shares trading. Deutsche
Banc Alex. Brown analyst Jim Moore said Oracle may have to lower revenue or
profit estimates since it has been cutting its prices.
General Electric lost $1.68 to $48.27, and merger partner Honeywell International
Inc. dropped $1.07 to $48.88. DuPont Co. declined $1.03 to $45.19 and Wal-Mart
Stores Inc. lost $1.09 to $51.74.
The optimism that the economy is turning around hurt bank and brokerage
shares because it boosted concern that the Fed might not cut rates further. J.P.
Morgan Chase & Co. slipped $1.87 to $47.98, and Citigroup fell $1.76 to $49.15,
leading the Dow average lower. American Express Co. lost $1.30 to $42.44.
Among brokerages, Morgan Stanley Dean Witter & Co. fell $2.51 to $62.79 and
Bear Stearns Cos. dropped $2.60 to $50.30.
``The last two weeks of economic reports are signaling that the economy is not
as bad off as some people thought,'' said William Rubin, who helps oversee
about $250 million of stocks at hedge fund Keefe Managers Inc. ``If one assumes
the economy has already bottomed, and therefore rates won't come down further,
then you might have an argument to sell bank stocks.''
Computer Associates Drops
Computer Associates International Inc. fell $3.06 to $32.19. The New York Times
reported yesterday that the maker of software to manage mainframe computers
has overstated sales and profits for years, citing analysts and former employees.
Chief Executive Sanjay Kumar said during a conference call this morning that the
company has complied with generally accepted accounting practices. The
company said the Times article was ``misleading'' and contained errors.
Dollar General Corp. lost $7.38, or 31 percent, to $16.50. The discount retailer
said in a press release it expects to restate earnings for the past three years
because of accounting irregularities.
Pier 1 Imports Inc. declined $3.45, or 24 percent, to $11.10. The
home-furnishings retailer said its fiscal first-quarter sales and earnings will miss
estimates because customers are buying sale items and lower-priced
merchandise. The stock has gained 41 percent this year.
The Russell 2000 Index of smaller stocks gained 1.35, or 0.3 percent, to 485.32. |
