US stocks surge
The Dow Jones industrial average moved into positive territory for the year today as investors piled back into the market.
Wall Street finished the week mixed, however, as tech stocks lagged behind the Dow components.
A flood of buy orders from institutional traders, impressed with the market’s ability to hold on to last week’s gains, pushed stocks higher. Analysts said the market has nearly recovered from January’s selloff, but remain split on whether the market has the potential to continue its run upward.
“I admit, the market’s acting better than I thought it would,” said Ken Tower, chief market strategist for Schwab’s CyberTrader. “The market was quite oversold over the past few days, and I think we’re bouncing off of that. It remains to be seen, however, whether this can be maintained.”
The Dow Jones industrial average rose 46.40, or 0.4%, to 10,796.01, after gaining 85.50 on Thursday. It was the Dow’s best showing since December 30.
Broader stock indicators also moved higher. The Standard & Poor’s 500 index rose up 8.29, or 0.7%, to close at 1,205.30, and the Nasdaq composite index gained 23.56, or 1.2%, to 2,076.66. Both remained down for the year, however.
Stocks experienced a volatile week as investors abandoned riskier technology shares and small-cap stock, leaning instead toward large-caps and blue chips. A relative dearth of economic data added to Wall Street’s uncertainty. For the week, the Dow rose 0.75% and the S&P climbed 0.19%, while the Nasdaq fell 0.48%.
Dell beat analysts’ profit estimates by a penny per share, but its record quarterly sales were still lower than expected, and investors were further disappointed by a tepid outlook for the current quarter. Dell was down 1.58 to 39.99.
Pixar Animation Studios dropped 2.82 to 87.06 despite beating Wall Street’s profit estimates by 14 cents per share. Earnings fell 34% from a year ago, when Pixar’s Finding Nemo was first sold on DVD.
Apple Computer’s board approved a 2-for-1 stock split for shareholders of record on February 18, with the split going into effect on February 28. The stock has soared 237% since its low of 21.89 on Feb. 23, 2004, as the company’s popular iPod music player spurred record sales. Apple climbed 2.85 to 81.21.
Dow Jones component Pfizer reportedly plans to slash 2 billion in costs, though widespread layoffs are not expected. The drug maker plans to reorganise its sales force as well, according to a report in The Wall Street Journal. Pfizer rose 10 cents to 25.15.
Verizon Communications rose 27 cents to 36.31 after the Journal reported that the Dow component’s acquisition talks with MCI could be wrapped up in a few days. The deal is said to match Qwest Communications International’s US$6.3 billion (€4.9bn) bid. MCI added 29 cents to 20.75, while Qwest slipped a penny to 4.15.
Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where volume was moderate.
The Russell 2000 index of smaller companies was up 7.95, or 1.3%, at 634.76.
