Dow surges above 10,000, Nadaq passes 2,000
Wednesday, December 5, 2001
AP Business WriterNEW YORK (AP) -- Technology shares propelled the stock market higher for a second straight session Wednesday, helping to boost the Dow Jones industrials more than 220 points and giving the blue chips their first close above 10,000 since Sept. 5.
The advance also lifted the Nasdaq composite index past 2,000 for the first time since early August.
Investors were betting that the battered tech sector would trigger a new bull market, and upbeat comments from Cisco Systems and Oracle fed the growing optimism.
Still, analysts said that while breaking through milestones like 10,000 or 2,000 is important to the investor's mood, they discounted Wednesday's performance as an indicator that a bull market had arrived.
The Dow surged 220.45, or 2.2 percent, to finish a heavily-traded session at 10,114.29. The Dow, which rose 129 points Tuesday, had not closed above 10,000 since Sept. 5, when it finished at 10,033.27.
It was also the Dow's best one-day point win since Sept. 24, when the blue chips rose 368 following the low of 8,235.81 they made Sept. 21 after the terror attacks.
Wall Street's broader stock indicators also rose sharply. The Nasdaq composite index soared 83.74, or 4.3 percent, to 2,046.84. The tech-focused index hadn't ended above 2,000 since Aug. 7 when it closed at 2,027.29.
The Standard & Poor's 500 index gained 25.55, or 2.2 percent, to 1,170.35.
Investors' enthusiasm mounted and the market ended near the session's highest levels as stock traders wanted to ensure they don't miss out on the next upturn.
"It's like, 'We have got to go in now,"' said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. "You are getting momentum going. And, momentum begets momentum."
Analysts attributed much of technology's strong run to buying by professional money managers who want to improve their portfolios' yearly performance. Historically, analysts said, the sector fares best in the fourth quarter.
"We are coming to the end of the year, and portfolio managers are reaching for performance. And tech stocks have done the best this quarter," Dickson said.
Indeed, technology has made the biggest strides since the Sept. 11 attacks. The Nasdaq has risen nearly 44 percent from its post-attack low of 1,423.19 on Sept. 21. The Dow has moved up almost 23 percent from its low; the S&P, up 21 percent.
But analysts were still cautious.
"The 10,000 number is a nice round number, but I don't think there is any magic to it," said Charles Blood Jr., senior financial markets analysts at Brown Brothers Harriman & Co.
Analysts warned that the market might not be able to sustain its run. In the near term, they said, investors will feel compelled to take some profits, particularly when economic data disappoints them.
Proof that tech dominated Wednesday's buying spree could be seen in Cisco and Oracle, which were the most heavily traded Nasdaq issues following positive forecasts from their chief executives.
Networking company Cisco rose $1.02 to $21.54 following encouraging news from CEO John Chambers, who told analysts Tuesday that November orders met expectations and that he feels the worst of the business downturn is over.
Software maker Oracle soared 11.4 percent, up $1.57 at $15.37, on comments Tuesday by CEO Larry Ellison, who said there were signs of improvement for the company and that business had stabilized.
The Dow's high-tech components contributed to the rise. IBM advanced $4.76 to $121.40, Microsoft rose $2.10 to $68.10, and Intel gained $1.75 to $34.61.
Outside technology, AOL Time Warner climbed $1.08 to $35.83 after the world's largest media company announced CEO Jerry Levin is stepping down and will be replaced by co-chief operating officer Richard Parsons.
There were some losers, including Ford, which fell 95 cents to $16.79 after warning of a bigger-than-expected fourth-quarter loss. Ford cited the weak economy, particularly high unemployment, for difficulties it is having collecting on car loans.
Advancing issues outnumbered decliners about 2 to 1 on the New York Stock Exchange. Volume came to 1.73 billion shares, well above the 1.30 billion traded Tuesday.
The Russell 2000 index, which tracks smaller company stocks, advanced 11.58, or 2.5 percent, to 479.42.
Overseas, stocks rose sharply, as well. Japan's Nikkei stock average finished with a gain of 2.5 percent. In Europe, France's CAC-40 climbed 3.3 percent, Britain's FT-SE 100 advanced 2.3 percent, and Germany's DAX index gained nearly 5 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com