Voltaire's Friends are Buying...'Stocks Blaze Upward'...
Tuesday April 10, 6:10 pm Eastern Time
By Elizabeth Lazarowitz
<<NEW YORK (Reuters) - Stocks blazed upward on Tuesday as investors hungrily snapped up shares for fear of missing a major rally after weeks of relentless selling on Wall Street.
An upgrade of European telecom firms by investment bank Credit Suisse First Boston also helped put traders in a buying mood after the selling drove major market indexes to two-year lows just last week, analysts said. This sparked a rebound in shares of telecom and telecom equipment firms like Ciena Corp. (NasdaqNM:CIEN - news) on both sides of the Atlantic.
``The pessimism is kind of reaching a crescendo,'' said James Oberweis, portfolio manager at Oberweis Asset Management, which oversees about $300 million. ``The sellers are pretty well played out, stocks are back to being reasonably valued and there's quite a bit of cash on the sidelines that doesn't want to miss the rally.''
The stampede of investors racing to get in on Wall Street's bounce pummeled U.S. Treasuries as traders pulled cash out of fixed-income assets. The stellar stock performance also quashed hopes for a near-term Federal Reserve rate cut, further eroding bond prices.
The blue-chip Dow Jones industrial average (.DJI) jumped 257.59 points, or 2.62 percent, to 10,102.74, closing above the key 10,000 level for the first time since March 15. The broader Standard & Poor's 500 Index (.SPX) climbed 30.79 points, or 2.71 percent, to 1,168.38.
The technology-laced Nasdaq Composite Index (.IXIC) surged 106.32 points, or 6.09 percent, to 1,852.03, bolstered by solid gains in computer chip, telecommunications and Internet-related stocks.
``Most of these stocks have discounted the depth of the slowdown that we expect,'' said John Barlett, portfolio manager at Commerce Bank in St. Louis. ``Earnings revisions may well stop going down pretty soon, and it may be that investors are getting some sense of that.''
Bond yields rose across the curve. Benchmark 10-year Treasury notes and 30-year bonds suffered their worst one-day losses since Jan. 3, when a surprise interest-rate cut sparked a monster stock market rally.
Last Thursday's big market gains on news that computer giant Dell Computer Corp. (NasdaqNM:DELL - news) stood by its first-quarter earnings forecast -- a rally that launched the Nasdaq index nearly 9 percent higher -- gave investors encouragement, as well as Monday's late-day rise, analysts said.
The American Stock Exchange telecom index (.XTC) rose 4.22 percent, as telecommunications companies jumped, including Lucent Technologies Inc. (NYSE:LU - news), up 47 cents at $7.22 and telecom-gear makers like Ciena, up $9.25 at $45.99.
The market managed to brush aside news from memory chip maker Cypress Semiconductor Corp. (NYSE:CY - news), which rose 94 cents to $16.34, even though it warned its results would miss estimates. The Philadelphia semiconductor index (.SOXX) rose 9.45 percent.
The market was also boosted by a surge in European stocks after British telecom equipment maker Marconi did not scare investors by issuing a profit warning, analysts said. Marconi was hit hard in European trading on Monday by rumors it would warn on profits.
Investors were awaiting Motorola Inc.'s (NYSE:MOT - news) results, hoping the worst is over for the world's second-largest mobile phone maker. Motorola already warned twice of disappointing results.
After the close, Motorola posted its first quarterly operating loss in 15 years, missing scaled-down expectations. Its shares were the most active on the New York Stock Exchange and added $1.50 to $13.00, but fell in after-hours trading to $12.83.
The recent barrage of companies warning the slowing U.S. economy will pinch their corporate profits has forced analysts to sharply lower their expectations.
On average, operating earnings of companies in the S&P 500 are expected to drop 8.6 percent in the first quarter of 2001 -- well below the 14.2 percent gain expected six months ago -- and fall 0.7 percent for the full year, according to Thomson Financial/First Call, which tracks earnings forecasts.
Investors might be shifting from bonds to stocks because they are hopeful that earnings warnings and other bad news from corporate America are nearly finished, said Steve Fossel, portfolio manager of the $125 million Berger Balanced fund.
``Coming into the first month of a quarter, you've gotten a lot of the bad news -- maybe 90 percent of it -- out of the way,'' he said. ``Now we should, hopefully, see company reports come in line, or close to expectations.''>>
______________________________________________
RR: I sure miss skiing...Its been almost two years since I have hit the slopes and I'm having withdrawal <VBG>....I grew up skiing (started skiing when I was a small child)...I used to think the Hills in Michigan were fun...then I remember the first family trip to Colorado (real Mountains and thousands of feet of vertical -- what a concept)...I went to college in Maine and I used to ski at Sunday River and Shugar Loaf with class mates and friends from the ski team...Then I lived and worked in W. Mass. and used to hit the slopes in Vermont and New Hampshire...Along the way I mixed in a few trips to Idaho, Lake Tahoe, New Mexico and Utah....Once I moved to Seattle I was in heaven -- it was only a couple hour road trip to Whistler and Blackcomb in BC. Then I went back to the MidWest to grad school and new opportunities -- my schedule has not allowed me to ski like I used to...I need to make time for it again. In fact, if I can close a couple of deals I'm working on I may do some spring skiing out in Oregon. My one of my closest friends from college and his wife live in Portland...As I recall Mt. Hood (or Mt. Bachelor) has a glacier and stays open late into the spring...It would be nice if I'm right and I can fit a long weekend of skiing in sometime in the next 6 weeks....=)
Best Regards,
Scott |
