Tech rally drives market advance
Nasdaq leads as networkers, chips surge
By Julie Rannazzisi, CBS.MarketWatch.com
Last Update: 12:59 PM ET Oct. 30, 2002
NEW YORK (CBS.MW) -- Techs rallied Wednesday, with outsized gains in the networking, chip and telecom sectors propelling the Nasdaq over 2 percent higher. The Dow's gains were more contained, with financial and drug issues lending support.
The networking sector's main gauge ($NWX: news, chart, profile) surged over 10 percent, with reassuring news from France's Alcatel providing the extremely positive undertone.
In the broader market, oil shares rallied after taking a drubbing on Tuesday, and were followed by the biotech, airline and bank sectors on the upside.
Shares of consumer products firms got a boost from Clorox's upbeat news while retail issues were bogged down by an analyst downgrade from Wal-Mart. Check market stats and latest sector performance.
The Dow Jones Industrial Average ($INDU: news, chart, profile) headed 57 points higher, or 0.7 percent, to 8,425, boosted by Intel, Hewlett-Packard, IBM, J.P. Morgan Chase and American Express. Losses showed up in shares of Wal-Mart, General Motors, General Electric, McDonald's and International Paper.
The Nasdaq Composite ($COMPQ: news, chart, profile) gained 27 points, or 2.1 percent, to 1,327 and the Nasdaq 100 Index ($NDX: news, chart, profile) added 27 points, or 2.9 percent, to 988.
The Standard & Poor's 500 Index ($SPX: news, chart, profile) advanced 1 percent while the Russell 2000 Index ($RUT: news, chart, profile) of small-capitalization stocks rose 1.1 percent.
Volume came in at 734 million on the NYSE and at 908 million on the Nasdaq Stock Market. Advancers outpaced decliners by 19 to 12 on the NYSE and by 18 to 12 on the Nasdaq.
Citi up; Clorox rallies
Citigroup (C: news, chart, profile) gained 1.1 percent after the Dow company announced that it had set up a new unit that'll include its equity research and private client brokerage operations. Sallie Krawcheck of Sanford Bernstein was named chairman and chief executive officer of the new operation. See the story. Fellow Dow components American Express and J.P. Morgan Chase rose 2.9 percent and 2.8 percent, respectively.
In analyst actions, Goldman Sachs lowered its view on Dow component Wal-Mart (WMT: news, chart, profile) to a "market performer" rating from the "recommended list" on valuation. The brokerage feels that additional appreciation vs. the market and the retail sector looks less likely. Shares of the retailing titan fell 3.7 percent and fellow Dow component Home Depot eased 1.3 percent.
Morgan Stanley upped its rating on Gillette (G: news, chart, profile) to an "overweight" from an "underweight" on growing optimism over the company's long-term growth prospects and on expectations of significant margin upside. Shares skipped 5.3 percent higher.
Clorox (CLX: news, chart, profile) rallied 6.4 percent after announcing a fiscal first-quarter profit that cruised past analysts' expectations. Further, the company backed Wall Street's second-quarter earning expectations and upped its 2003 profit forecast.
On Tuesday, consumer stocks got a lift following better-than-expected results from Dow component Procter & Gamble. P&G fell 0.1 percent on Wednesday.
In Europe, Anglo-Dutch consumer products form Unilever (UN: news, chart, profile) rose 4.8 percent after lifting its target for earnings-per-share growth for the year to the "high teens" from earlier projections of "mid-teens" growth.
Wachovia Securities sliced its rating on Goldman Sachs (GS: news, chart, profile) to a "hold" from a "buy" following the brokerage's recent stock appreciation and lowered earnings projections. Goldman edged up 0.2 percent, recovering earlier losses.
Dow stock DuPont (DD: news, chart, profile) rose 0.4 percent after unveiling a restructuring of its coatings and color technologies businesses that will lead to a reduction of 650 workers and a four-cent-a-share charge in the fourth quarter. The company anticipates saving $60 million a year thanks to the changes.
Standard & Poor's lowered its long-term credit rating for Dow Jones & Co. (DJ: news, chart, profile) to incorporate more volatility associated with the company's major operation, The Wall Street Journal. Shares rose 0.1 percent, erasing earlier declines.
Alcatel surges
French telecom equipment maker Alcatel (ALA: news, chart, profile) soared almost 38 percent after reiterating its plans to return to profitability next year and telling investors that it had increased its cash position in the third quarter. See full story. Lucent flew 17 percent and Nortel added on 9.2 percent.
Qwest Communications (Q: news, chart, profile) reported a third-quarter loss that was narrower than anticipated and said it full-year results would come in at the low end of its previously given targets. The stock ran up 8.5 percent. See full story.
Corning (GLW: news, chart, profile) piled on 8 percent after telling investors it would slice another 2,200 jobs in a bid to return to profitability. Going forward, the fiber-optic firm expects its fourth-quarter loss, excluding charges, to total 8 to 12 cents per share vs. the 6-cent loss that had been projected by Thomson First Call. See story.
See Movers & Shakers for the latest individual stock news.
Treasurys backpedal
Treasury issues retreated after rallying to levels not seen in over two weeks on Tuesday, fueled by growing rate cut expectations.
Treasury announced it would sell $22 billion in 5-year notes and $18 billion in 10-year notes next week as part of its quarterly refunding auction. Treasury officials also said they don't expect to sell securities with maturities beyond 10 years over the next decade.
"I'm still bullish on the Fed easing, but do recognize that the trade does get a bit trickier from here. The coordinated Fed propaganda of last week and the weekend is hard to ignore. [But] I'm not convinced that 10-year notes will be higher in price one to two days after a 25 basis point or 50 basis point rate cut -- a cut may be better for stocks and corporates," said Peter McTeague, treasury strategist at RBS Greenwich Capital.
The problem for market direction, McTeague added, is that there's refunding supply coming. And the market could use a rest ahead of the key numbers due out later in the week, he said.
The 10-year Treasury note retreated 5/32 to yield ($TNX: news, chart, profile) 3.96 percent while the 30-year government bond dipped 6/32 to yield ($TYX: news, chart, profile) 5.025 percent. See Bond Report.
No economic news is set for release on Wednesday. The week's big numbers will be unfurled Friday: nonfarm payrolls are expected to show an increase of 5,000 and the October jobless rate is seen edging up to 5.8 percent, according to economists polled by CBS.MarketWatch.com; and the October ISM index is expected to have dipped to 48.9 percent.
Also, the advance reading on gross domestic product, expected to have risen 3.6 percent, will be out Thursday. Check economic calendar and forecasts.
In the currency sector, the dollar edged down 0.1 percent to 122.86 yen while the euro added 0.1 percent to 98.31 cents.
The Bank of Japan decided to further ease credit conditions to help speed up banks' bad loan disposal. The BOJ will increase monthly outright purchase of long-term government bonds by 200 billion yen to 1.2 trillion yen, or about $9.8 billion. See related story.
Julie Rannazzisi is markets editor for CBS.MarketWatch.com in New York. |
