<font color=blue>MARKET SNAPSHOT 4:42 PM
Lots of treats for the Nasdaq
Dow also picks up steam in broad rally
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 4:42 PM ET Oct 31, 2000
NEW YORK (CBS.MW) - Halloween brought lots of goodies to the market, with technology stocks staging a furious advance Tuesday, concluding a tumultuous October on an upswing. The Nasdaq is down 8.3 percent for October versus a 0.5 percent decline for the S&P 500.
The Dow Industrials cruised higher for a fourth straight session, adding 6.2 percent during the same period. The blue-chip barometer closed at its highest level since mid-September even as component Procter & Gamble slid 7.1 percent.
"This was very constructive, broad-based action," remarked Donald Selkin, chief market strategist at Joseph Gunnar. "All engines were firing on the same cylinder."
"Alcatel's [better-than-expected earnings] was a real positive for techs. The company is viewed as the Nortel of Europe," said Mike Sheldon, chief strategist at Spencer Clarke.
With tax-loss selling concluded and the tech sector entering a seasonally favorable period of the year, market watchers have high hopes for the Nasdaq.
To confirm Tuesday's smashing move, Selkin wants to see follow-through buyers emerge on positive breadth over the next sessions. Further, he's looking for the Nasdaq to clear the 3,500 hurdle, where it has stalled during the past couple of weeks.
Leading techs on the upside were awesome rallies in networking, chip and Internet shares, where the business-to-business segment really captured investors' fancy. The closely-monitored Philly Semiconductor Index ($SOX) managed a 5.5 percent even as Rambus (RMBS), one of its components, shaved 15.9 percent.
In the meantime, the overall market was underpinned by a climb in retail, biotech and financial issues. Even cyclical registered modest gains by the end of the day, extending the scintillating rally witnessed on Monday. Only drug and gold stocks backpedaled.
The Dow Jones Industrials Average ($DJ) climbed 135.37 points, or 1.2 percent, to 10,971.14. Among the winners were shares of Boeing - which reached a fresh 52-week high -- Home Depot, J.P. Morgan and General Motors. And IBM (IBM) put on $5.19 to $98.50 after announcing a $3.5-billion buyback program.
Procter & Gamble (PG) was the index's downside mover, losing $5.44 to $71.44 after reporting earnings that met Wall Street's expectations but failed to generate enthusiasm.
The Nasdaq Composite ($COMPQ) tacked on 178.15 points, or 5.6 percent, to 3,369.55 while the Nasdaq 100 Index rallied 201.02 points, or 6.5 percent, to 3,282.09.
Sheldon was encouraged by the Nasdaq's performance. "The index has been able to hold the 3,000 level on multiple occasions. It's way oversold and ready for a bounce."
What Sheldon wants to see are two to three solid follow-through upside days for the Nasdaq taking place on solid volume and broad-based participation.
The Standard & Poor's 500 Index ($SPX) gained 2.2 percent while the Russell 2000 Index ($RUT) of small-capitalization stocks rose 3.1 percent.
Volume was very healthy at 1.35 billion on the NYSE and at 2.14 billion on the Nasdaq Stock Market. Market breadth was positive, with advancers pouncing on decliners by 21 to 9 on the NYSE and by 28 to 13 on the Nasdaq.
Sector movers
Internet stocks rallied heartily on the last day of a month that has been an extremely grueling one for the group. In fact, the Goldman Sachs Internet Index ($GIN), up 9.7 percent on Tuesday, has fallen a bruising 22 percent in October. B2B and infrastructure plays led the advance with PurchasePro (PPRO), up 32.5 percent, and Exodus Communications (EXDS), up 27.9 percent, highlighting the scintillating move.
Networking shares stole the show in the tech arena Tuesday, with Cisco Systems (CSCO) climbing $5.81, or 12.1 percent, to $53.88 after a rough session Monday during which it lost as much as 10.7 percent. The climb in the networking monolith buttressed the Amex Networking Index ($NWX) by a whopping 10.6 percent.
Better-than-expected earnings from Alcatel - Europe's second-largest telecom equipment maker - gave many of the recently hard hit fiber-optic stocks reason to cheer and also buoyed wireless telecom stocks.
France's Alcatel (ALA) said its record performance in the third quarter was underlined by strong gains in data and optical networking sales. Further, Alcatel expects 2001 revenue growth to be greater-than-expected, with early indications showing growth in the company's telecom business of at least 25 percent. Read the full story. Shares put on $5.25 to $62.38.
Last week, Canada's Nortel Networks sent shockwaves through the high-octane networking and fiber-optic sectors when it missed analysts' revenue estimates by $200 million last week. On Tuesday, Nortel (NT) rose $3.75 to $43.75, Ciena (CIEN) gained $8.31 to $99 and JDS Uniphase (JDSU) rose $5.44 to $76.75. Merrill Lynch's Broadband Holdrs (BDH), which includes Nortel, JDS and Ciena, tacked on a lofty 9.2 percent.
Chip stocks ascended even as Rambus was hit by a decline of $10.19 to $43.25. Rambus was hurt by an industry report that Intel intends to drop the company's dynamic random-access memory technology from its computing platforms, with the exception of high-end workstations, by mid-2001. Other chip stocks flew amid the Rambus slump: Xilinx (XLNX) rose 8.3 percent after Merrill Lynch added the stock to its "Focus I" list, Advanced Micro Devices (AMD) put on 11.7 percent and PMC-Sierra (PMCS) rallied 11.0 percent.
Treasury focus
In the government market, prices slid as equities gained momentum. The 10-year Treasury note slipped 6/32 to yield ($TNX) 5.76 percent while the 30-year bond gave up 17/32 to yield ($TYX) 5.79 percent.
Little reaction was seen to the morning's spate of economic news. Tuesday saw the release of October consumer confidence, which fell to 135.2 from September's 142.50 and came in less than the expected 140.2 level. It was the index's lowest reading since October 1999, with the equity market's poor performance in the September-October period impacting confidence.
Also out: September new home sales, which climbed by an unexpectedly large 9.2 percent to 946,000, much higher than the expected 888,000 and the second highest level of the year. It was the second-highest pace for home sales in the year.
Finally, the Chicago Purchasing Mangers Index decreased to 48.7 in October versus the previous 51.4. Wednesday will see the release of the National Association of Purchasing Management Index, seen coming in at 49.6 percent. View Economic Preview, economic calendar and forecasts and historical economic data.
Cornering the currency market, dollar/yen ended at flat levels at 109.02 while euro/dollar jumped 1.1 percent to 0.8484. |
