Associated Press
NEW YORK – Blue chip stocks moved higher today, buoyed by a pre-election spending spree that sent the Dow Jones industrial average as high as 11,000. But technology issues couldn’t keep up, weighed down by investors concerns about Cisco Systems’ earnings.
Analysts cautioned against reading too much into the Dow’s rally, saying uncertainty still rules the markets.
“You’re a day before a presidential election that nobody can get their arms around, so there’s gravitation toward buying safe blue chips,” said Larry Wachtel, a market analyst at Prudential Securities. “But trading volume is low, breadth is negative and generally this is a very cautious day.
“The Dow represents 30 stocks out of 10,000.”
The Dow closed up 159.26 at 10,977.21, according to preliminary calculations, losing some ground after hitting 11,000 for the first time since mid-September. The average is up more than 1,000 points in the 13 trading days since Oct. 18, when it fell as low as 9,571.40; this is the fastest 1,000-point gain ever in the Dow.
Broader stock indicators were mixed. The Nasdaq composite index fell 35.19 to 3,416.39, with much of its loss coming in the last hour of trading. The Standard &Poor’s 500 index was up 5.50 at 1,432.19.
Although Tuesday’s presidential election is still considered too close to call, the generally conservative, pro-Republican market appeared to be inspired by polls giving a slight edge to GOP nominee George W. Bush.
“This is a Bush market today,” said Jack Shaughnessy, chief investment strategist at Advest Inc. “Obviously people are viewing the prospect of his presidency as being very positive for investors. This is also a continuation of last week’s positive momentum.”
But tech stocks struggled, pulled lower by Cisco Systems, which was reporting first-quarter earnings after the close of trading. It fell $1.63 to $55.13.
“They’re the bellwether out there, and people have been very concerned about technology earnings,” said John Forelli, portfolio manager with Independence Investment Associates. “People will be really focusing on the revenue line and whatever tidbits they can get out of it about future growth.”
Oracle fell $2.38 to $27.94. JDS Uniphase slipped $3.81 to $77.43.
Blue chips’ advances were spread across many stocks sectors, but pharmaceutical, energy and defense stocks, all expected to benefit if Bush wins, were particularly strong.
Drugmaker Merck rose $2.13 to $89.75, energy company Enron shot up $4.19 to $81.56 and defense contractor Lockheed Martin climbed $1.21 to $33.51.
Financials also performed well, led by banker J.P. Morgan, which rose $4.58 to $166.31.
Declining issues outnumbered advancers by a 12-to-11 ratio on the New York Stock Exchange, where volume came to 920.51 million shares, compared with 987.99 million the previous session.
The Russell 2000 index slipped 3.79 to 503.96
Overseas, Japan’s Nikkei stock average rose 3.6 percent. Germany’s DAX index was up 0.11 percent, Britain’s FT-SE 100 was up 0.71 percent, and France’s CAC-40 slipped 0.73 percent. .
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