Dow surges above 10,000, Nasdaq passes 2,000
Wednesday, December 5th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ Surging technology stocks propelled the Dow Jones industrials more than 220 points higher Wednesday, allowing the blue chip index to close above 10,000 for the first time since before the Sept. 11 terror attacks.
The advance also lifted the Nasdaq composite index past 2,000 for the first time since early August.
Investors were betting that the battered tech sector would trigger a new bull market, and they don't want to miss out on the market's next upturn, analysts said. Upbeat comments from Cisco Systems and Oracle fed the growing optimism.
``It's like, `We have got to go in now,'' said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. ``You are getting momentum going. And, momentum begets momentum.''
After a session of heavy trading, the Dow surged 220.52, or 2.2 percent, to finish at 10,114.36, according to preliminary calculations. The Dow, which rose 129 points Tuesday, had not closed above 10,000 since Sept. 5, when it finished at 10,033.27.
Wednesday was also the Dow's best one-day point win since Sept. 24, when the index rose 368 points following the low of 8,235.81 it struck on Sept. 21.
Still, analysts said breaking through milestones like 10,000 or 2,000 was more important to the mood of investors than it was as a true indication of a bull market.
Broader stock indicators also rose sharply. The Nasdaq composite index soared 83.94, or 4.3 percent, to 2,047.04. The tech-focused index hadn't ended above 2,000 since Aug. 7.
The Standard & Poor's 500 index gained 25.55, or 2.2 percent, to 1,170.35.
Analysts attributed technology's strong run to buying by professional money managers looking to improve yearly performance. Historically, analysts said, the sector fares best in the fourth quarter.
``We are coming to the end of the year, and portfolio managers are reaching for performance. And tech stocks have done the best this quarter,'' Dickson said.
Technology has made the biggest strides since the Sept. 11 attacks. The Nasdaq has risen nearly 44 percent from its post-attack low of 1,423.19 on Sept. 21. The Dow has moved up almost 23 percent from its low; the S&P, up 21 percent.
But analysts were still cautious.
``The 10,000 number is a nice round number, but I don't think there is any magic to it,'' said Charles H. Blood Jr., senior financial markets analyst at Brown Brothers Harriman & Co.
Analysts also cautioned that the market might not be able to sustain its run and felt investors might feel compelled to take some profits shortly.
Positive forecasts from Cisco and Oracle made those companies the most heavily traded Nasdaq issues on Wednesday.
Networking company Cisco rose $1.02 to $21.54 following encouraging news from chief executive John Chambers, who told analysts Tuesday that November orders met expectations and that he feels the bulk of the business downturn is over.
Software maker Oracle soared 11.4 percent, up $1.57 at $15.37, on comments Tuesday by CEO Larry Ellison, who said there were signs of improvement for the company.
The Dow's high-tech components contributed to the rise. IBM advanced $4.76 to $121.40, Microsoft rose $2.10 to $68.10, and Intel gained $1.75 to $34.61.
Outside technology, AOL Time Warner climbed $1.08 to $35.83 after the world's largest media company announced CEO Gerald Levin is stepping down and will be replaced by co-chief operating officer Richard Parsons.
There were some losers, including Ford, which fell 95 cents to $16.79 after warning of a bigger-than-expected fourth-quarter loss. Ford cited the weak economy, particularly high unemployment, for difficulties it is having collecting on car loans.