Unpredictable Nasdaq posts second day of big gains...
By Elizabeth Smith
<<NEW YORK, April 18 (Reuters) - The Nasdaq, once again proving itself utterly unpredictable, put in a second straight day of record gains on Tuesday, eradicating Friday's huge losses and posting the single largest one-day point gain ever.
The Nasdaq composite index (^IXIC - news) leaped a whopping 7.19 percent, or 254 points, to close at 3793.57.
Nasdaq's performance was, in part, a spill-over from the relief rally that kicked in on Monday after the index plunged a harrowing 11 percent on Friday and ended the week with a 25 percent loss, the sharpest ever for a major U.S. market index.
Internet and biotechnology stocks, which did not play a role in Monday's Nasdaq rally, fuelled the momentum on Tuesday morning. Nasdaq's blue chips, along with its semiconductor and computer-related stocks, contributed heavily to the gains.
Upbeat earnings news also drove up stocks, with tech giants such as Intel Corp. (NasdaqNM:INTC - news) and America Online (NYSE:AOL - news) set to report after the market close. Intel, the world's No. 1 computer chip maker, jumped 6 to 129. Applied Materials (NasdaqNM:AMAT - news), a company that makes the equipment that chip manufacturers use, rose 4-3/8 to 101.
The Nasdaq index of top 100 stocks (^NDX - news) , which includes the nation's most valuable tech stocks, shot up 5.28 percent, or 186.36 points, to 3715.
The Dow Jones Industrial Average (^DJI - news) also put in a sterling performance, increasing 185 points, or 1.75 percent, to 10767.42.
As usual, Internet routing equipment maker Cisco Systems Inc. (NasdaqNM:CSCO - news) , was the Nasdaq's most active stock. Cisco, the most heavily weighted issue in the Nasdaq composite and the most valuable company on earth, closed at 69-1/4, down 2-3/4.
Cypress Semiconductor Corp. (NYSE:CY - news) , a maker of static random access memory chips, also gave tech stocks a boost. It reported first-quarter operating profits a penny ahead of expectations.
Cellular telephone equipment maker Qualcomm (NasdaqNM:QCOM - news) , which reported second-quarter results after the close, watched its stock price drop 4-11/16 to 112-3/16. The company reported fiscal second quarter net income rose to $199.7 million, or 25 cents a share, topping Wall Street expectations of 24 cents a share.
Novellus Systems (NasdaqNM:NVLS - news) rose 7-3/16 to 60-11/16 after Dutch bank ABM-AMRO Bank raised its estimate and price target for the the semiconductor manufacturer. The company late on Monday posted stellar first-quarter earnings.
But whether or not the party on the Nasdaq lasts through the week is still a wide open question.
``On Friday, these stocks cost too much and now people are willing to hold them,' said Pierre Ellis, senior economist with Primark Decision Economics. ``The economy does not have a lot of trappings of a boom phase. If the Fed concludes this is boom, then they will fight it aggressively.'
Consistently robust retail sales still have the Federal Reserve fretting about inflationary pressures.
``The market and the Fed have to decide if that kind of demand is going to persist, then they have to decide how to act,' Ellis said.
Consumer confidence will be under a microscope for the rest of the year, unless economic indicators make it clear that demand is diminishing, he said.
But investors brushed aside Fed angst on Tuesday, piling into the beaten-down Internet sector. The Dow Jones Internet index (^DJINET - news) rocketed 17 percent, or over 40 points, to 277.38.
Online auctioneer eBay (NasdaqNM:EBAY - news) shot up nearly 20 points to close at 162-15/16. Popular Internet portal Yahoo! (NasdaqNM:YHOO - news) also had a good day, closing up 12-5/16 at 126-11/16. Internet retailer Amazon.com (NasdaqNM:AMZN - news) shot up 7-14/16 to close at 54-15/16.
Biotechnology shares recaptured some of their luster on Tuesday as investors went bargain-hunting after the sector's slump over the past month, which accelerated during last week's stock market plunge.
Market leader Amgen (NasdaqNM:AMGN - news) rose 5 to close at 58-3/8. Antibiotics maker Cubist Pharmaceuticals (NasdaqNM:CBST - news) increased 13-5/8 to 30-7/8.
The Nasdaq biotech index (^BTK - news), which is made up of shares in 137 biotechnology firms, surged 10.2 percent to 446.86.>> |
