Dow surges above 10,000 points
Thursday, December 6, 2001
NEW YORK -- 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.
Highest since September
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 gain 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.
No magic number
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.