US stocks close higher
Wall Street remained positive today and stocks enjoyed some slim gains in response to positive economic news and managed to offset some typical year-end tax selling.
The Dow Jones industrials also reached their highest level since the September 11 terror attacks.
The market was boosted when the Conference Board reported its Consumer Confidence Index rose to 93.7 from 84.9 in November. Meanwhile, sales of new homes soared 6.4% in November, the largest increase in nearly a year, according to the Commerce Department.
The Dow rose 5.68, or 0.06%, to 10,136.99. It was the Dow’s best close since the terror attacks, which caused the blue chips to drop to a yearly low of 8,235.81 on September 21. The Dow also has gained 95 points in the previous two sessions.
The broader market was also higher. The Nasdaq composite index rose 10.85, or 0.6%, to 1,987.27 and the Standard & Poor’s 500 index advanced 3.89, or 0.3%, to 1,161.02.
Investors were also heartened by a report on durable goods orders. Although orders to US factors fell 4.8% in November due mostly to a big drop in demand for military airplanes, demand rose for many other big-ticket items, including computers, cars and industrial machinery.
‘‘To me, the market’s responding to the fundamentals. There’s been some positive earnings news, some positive guidance, and today you had a nice jump in consumer confidence. That’s all good for stocks,’’ said Jeffrey Applegate, chief investment strategist at Lehman Brothers.
While the market’s mood was upbeat, some investors sold stocks to take tax losses for 2001, a yearly occurrence and particularly predictable in years in which the market falls.
‘‘You are down to the crunch time of those who are left to take some tax losses. It makes sense for taxable investors, and when you have had back-to-back down years, you have to expect some year-end tax loss selling,’’ said Matt Brown, head of equity management at Wilmington Trust.
Today’s gains were mostly concentrated in tech sectors, which many investors expect will lead the market higher in 2002. Broadcom rose 95 cents to dlrs 43, while PMC-Sierra gained 93 cents to dlrs 22.78.
Yahoo! climbed 53 cents to dlrs 18.30.
Blue chips were more mixed. American Express rose dlrs 1.05 to dlrs 36.05, but Procter & Gamble fell 64 cents to dlrs 79.51. General Motors gained dlrs 1 to dlrs 48.92, while Coca-Cola declined 77 cents to dlrs 47.17.
Oil stocks were slightly higher as Opec confirmed it would slash 1.5 million barrels a day from its daily crude production to firm up sagging oil prices. The cuts, a 6% reduction, will begin on January 1, and last at least six months. Conoco rose 13 cents to dlrs 28.38, while ChevronTexaco also gained 13 cents to close at dlrs 90.44.
Another reason for today’s gains was the so-called Santa Claus rally, an annual occurrence between Christmas and New Year when stocks move higher as investors grow hopeful about the year ahead and money managers adjust portfolios, picking up stocks that have reached bargain prices.
With one more trading session left in 2001, the major indexes are still showing significant losses. The Dow is off 6%, while the S&P 500 is down 12%. The Nasdaq, which skidded early in the year amid the continuing shakeout in high-tech companies, is off nearly 20% for the year.
Advancing issues outnumbered decliners nearly 2 to 1 on the New York Stock Exchange. Trading volume has been light this week because of the holidays, making stocks more susceptible to fluctuations as there were fewer prospective buyers or sellers.
The Russell 2000 index, which tracks smaller company stocks, rose 1.00, or 0.2%, to 493.62.
