Tech stocks soar as bears take the day off on Wall Street


Associated Press

NEW YORK — The bulls returned to Wall Street today, lured by cheaper stocks and better-than-expected earnings from some of the nation’s biggest retailers. But after a week of declines, analysts were skeptical about the market’s ability to sustain the rally.

The spending spree in technology and blue chip stocks pushed the Dow Jones industrial average and Nasdaq composite index up more than 160 points each, even as the Democrats and Republicans again clashed over the undecided presidential election.

Richard Dickson, a technical analyst with Scott &amp Stringfellow, cautioned against viewing the upturn as a firm indicator of the market’s conviction, or a return to a bull market, particularly with regard to technology stocks.

"We have seen this kind of thing before. These types of rallies don’t necessarily stick," he said.

The Dow closed up 163.81 at 10,681.06, a 1.6 percent gain.

Broader stock indicators also advanced smartly.

The Nasdaq rose 171.55 to 3,138.27, a 5.8 percent increase, a day after closing below 3,000 for the first time in more than a year. The Standard &amp Poor’s 500 rose 31.69 to 1,382.95.

High-tech winners included Cisco Systems, up $2.75 at $53.13, and Sun Microsystems, which climbed $8.69 to $94.

Blue chips were led by retailer Wal-Mart, which rose $1.38 to $46.88 after reporting its third-quarter earnings rose from the same period a year ago. Home Depot advanced after reporting earnings in line with Wall Street expectations. It rose $1.81 to $39.19.

Financial stocks also surged, including J.P. Morgan, up $2.13 at $155.56.

"The growth prospects are still there," said Lisa Costa, senior portfolio manager of the American Express Growth Fund. "But you’re not going to see stocks reverse on a dime. What you will see is leading companies with leading products … do better than the rest of the market. Those companies that don’t have a clue … are going to have a more difficult time."

Utilities lagged as investors gravitated toward higher-growth issues. Duke Energy fell $2.13 to $84.63, as did AES, which slid $2.13 to $56.38.

Overall, though, today was a marked contrast to the past few sessions, when investors fled Wall Street in response to news that several big high-tech firms didn’t meet earnings expectations or were forecasting disappointing fourth-quarter results.

Uncertainty about the presidential election has heightened the volatility. Although Democrats and Republicans continued to disagree Tuesday about the vote recount in Florida, the market seemed less worried than in recent days.

"The market is thinking there is some possibility or some hint that we might get much closer to a resolution of this political situation, although I still think it’s up in the air," said Gregory Nie, a technical analyst at First Union Securities.

Investors also might have been influenced Tuesday by comments from Abby Joseph Cohen and Alan Greenspan.

Cohen, the chief market strategist at Goldman Sachs, told the investment firm’s clients stock valuations are attractive and that it’s time to start buying.

And Federal Reserve Chairman Greenspan, in an address to bankers in Mexico City, said he remains impressed with the high-tech industry’s growth and its contributions to making the economy more productive. The Fed’s policy-making Open Market Committee meets Wednesday, and many observers are hopeful the central bank will relax its concerns about inflation.

Advancing issues outnumbered decliners nearly 2-to-1 on the New York Stock Exchange, where volume came to 1.11 billion shares compared with 1.11 billion in the last session.

The Russell 2000 index rose 10.36 to 486.91.

Overseas, Japan’s Nikkei stock average was essentially flat, slipping 0.03 percent. Germany’s DAX index rose 3.3 percent, Britain’s FT-SE 100 was up 2.2 percent, and France’s CAC-40 climbed 3.1 percent.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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