Stock market rallies on its own accord
Published 9:00 pm Monday, May 21, 2001
Associated Press
NEW YORK — Wall Street went on a technology buying spree Monday, despite the absence of any obvious catalyst, sending the Nasdaq composite index soaring more than 100 points and the Dow Jones industrials to their highest close in 16 months.
The rally was notable because it came on a day when there were no major earnings or economic data. Investors appeared to be buying solely on the expectation that better times are ahead and the determination to get into the market before prices get much higher.
"There’s an old saying on the Street: When you can move a market without news, that’s the best news around," said Larry Wachtel, market analyst with Prudential Securities. "This market has been improving for two solid months and what’s happening is that all the money on the sidelines that’s built up is barreling in. People are saying, ‘I have to get in there.’ "
The Nasdaq rose 106.71 to 2,305.59, the first time since last August that the tech-dominated index has risen five straight sessions.
The Dow Jones industrial average closed up 36.18 at 11,337.92, adding a 428.77-point gain over the previous three sessions. The last time it closed that high was Jan. 20, 2000, when it reached 11,351.30.
The blue chip index, which slipped briefly into bear market territory in March, has recovered to the point where it now just 3.3 percent off its highest close ever of 11,722.98, reached Jan. 14, 2000. It also has a 5.1 percent gain so far this year.
Strong technology buying drove the market Monday. Sun Microsystems rose $2.40 to $22.37 on news of a new, five-year, $200 million agreement with Eastman Kodak. Cisco Systems was up $2.67 at $22.87 on the release of a new product that allows traditional telephones to be used over the Internet.
The enthusiasm for high-tech also helped the Dow, as did a strong advance in financial stocks. American Express gained $1.29 to $44.99.
Those advances compensated for a drop in Procter & Gamble, which fell $2.23 to $65.25 after announcing it will buy Clairol, the hair care products maker, for $4.95 billion in cash.
Analysts say conditions on Wall Street have been improving for the past six weeks, primarily in reaction to the Fed’s aggressive interest-rate reductions. Although they expect the market to hold most of its gains, they have said investors will need good news — like strong earnings or another interest rate cut — to support an extended rally. Neither is expected to happen for at least a month, but that didn’t deter investors Monday.
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