Nasdaq Rises 143, Dow Ends Up 57
Wednesday, July 12th 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” Stock prices surged Wednesday after better-than-expected quarterly earnings by Internet giant Yahoo! sent investors scrambling for technology stocks.
The re-emergence of the technology sector helped push the tech-focused Nasdaq Stock Market back into positive territory for the year.
The Dow Jones industrial average closed up 56.57 at 10,783.76, after being up nearly 100 points earlier in the session.
Broader stock indicators were also higher. The Nasdaq composite index closed up 143.17 at 4,099.59 and the Standard & Poor's 500 index rose 12.04 at 1,492.92.
Investors seem to have shed long-held concerns over interest rate hikes, analysts said, and instead embraced an optimistic view toward second-quarter earnings reports, which are starting to trickle in.
``There are those who feel the Federal Reserve Board may have done its job â€” for now,'' said Alan Ackerman, senior vice president at Fahnestock & Co.
With the season for second-quarter earnings reports just getting under way, a strong showing from Yahoo! helped boost the technology sector, which had been battered in recent weeks on fears that second-quarter earnings may be disappointing.
``This just goes to show that the market has bounced back from its lows and appears ready to start retracing the upward trend we saw earlier this year,'' Ackerman said.
Yahoo!'s shares rose $19.438 to $124.938. CMGI was also higher, rising $6.938 at $43.438, as was eBay, which gained $8.687 to $52.625.
The surprisingly solid quarter from Yahoo! followed better-than-expected reports from International Paper and Alcoa earlier this week, which helped give a lift to blue-chip stocks.
While individual earnings reports have boosted stocks in recent days, some analysts believe the market still lacks direction.
``Yesterday, a strong day for value-biased stocks because of International Paper's earnings. Today, we have Yahoo! pulling up the tech stocks,'' said Brian Belski, vice president at U.S. Bancorp Piper Jaffray. ``But the question is: What will tomorrow bring? There is still a lot of indecision in the market and the performance has been very varied.''
The market continued to benefit from comments made Tuesday by Federal Reserve Chairman Alan Greenspan. Speaking before the National Association of Governors, Greenspan talked up the country's improved productivity, which analysts took as a sign that inflation may be in check.
In recent weeks, there have been signs that the pace of the economy is slowing down, and without any inflationary pressures, investors hope that the Fed may be done raising interest rates after six rate hikes in the past year.
Many investors, however, were still watching their moves ahead of another speech from Greenspan on Wednesday night at a conference organized by the Council on Foreign Relations.
Shares of New York investment bank PaineWebber rose $16.937 to $66.875 after it announced that it was being purchased by Swiss banking group UBS.
The merger set off a rally in banking and financial services stocks. Lehman Brothers rose $5.187 to $111.625 and Merrill Lynch gained $2.563 to $131.536.
Advancing issues outnumbered decliners by nearly a 3-to-2 margin on the New York Stock Exchange, where volume came to 994.65 million shares, up from 976.14 million shares on Tuesday.
The Russell 2000 index was up 10.51 at 540.25.
Overseas, Japan's Nikkei stock average fell .93 percent. Germany's DAX index was up 0.89 percent, Britain's FT-SE 100 was up 0.66 percent, and France's CAC-40 was up 0.71 percent.