Dow Gains 112; Nasdaq Climbs 25
Monday, July 3rd 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” Blue-chip stocks sprinted higher Monday in a quiet, shortened session ahead of the Independence Day holiday. A report of moderating economic growth helped inflation-sensitive stocks advance.
The Dow Jones industrial average rose 112.78 points to close at 10,560.67.
Broader stock indicators were also higher, although they failed to match the Dow's momentum. The Standard & Poor's 500 index was up 14.72 at 1,469.32, and the Nasdaq composite index was up 25.82 at 3,991.93.
Trading was extremely light. The stock market closed at 1 p.m.; many Wall Street professionals had taken the day off, opting for a four-day weekend. Composite volume on the New York Stock Exchange came to 656.23 million shares, well below average.
Still, a few catalysts drove trading. The National Association of Purchasing Management reported a slowdown in manufacturing activity growth, raising hopes that six interest-rate increases by the Federal Reserve in the past year are slowing the economy to a more sustainable pace.
The purchasing managers' business index for June came in at 51.8, compared with 53.2 in May. While any reading above 50 is considered a sign of economic growth, the index was lower than analysts had anticipated.
What's more, the report's ``prices paid'' index fell from 65.8 in May to 61.2 in June. That component is considered an important gauge of inflationary pressures.
``The market is telling a pretty good story,'' said Alan Ackerman, senior vice president at Fahnestock & Co. in New York. ``This was a favorable piece of news that I think will allow some interest-rate jitters to fade away.''
Rate-sensitive stocks rose. J.P. Morgan gained $5.625 to $115.75 and First Union rose $1.188 to $26.188.
Economists said the purchasing managers' report makes it less likely that the Fed will raise interest rates at its next meeting Aug. 22. With interest-rate worries fading, investors should be able to concentrate on corporate earnings for the recently ended second quarter, analysts said.
``We should start seeing a flow of positive earnings reports, and that could help the market break out of the range-bound condition it's been in,'' Ackerman said.
Verizon, the company formed by the completion of the $59 billion merger of Bell Atlantic Corp. and GTE Corp., rose $4.625 to $55. It was the first day of trading for the newly combined company.
Oracle fell $3.875 to $80.188. Late Friday, the company announced that chief operating offer and president Ray Lane will leave his post.
Advancing issues outnumbered decliners by a 2-to-1 margin on the NYSE, and by a slender margin in Nasdaq trading.
The Russell 2000 index of smaller companies rose 6.80 to 524.03.
Overseas indexes were mostly higher, including Mexico's key IPC index. Investors were celebrating the presidential victory of opposition candidate Vicente Fox, whose victory ends the Institutional Revolutionary Party's 71-year grip on the presidency.
Analysts said the election wasn't a significant factor in U.S. stock trading, but may stimulate interest in Mexican stocks in the coming sessions.
Elsewhere, Japan's Nikkei stock average rose 1.2 percent. Germany's Xetra DAX index rose 0.9 percent, Britain's FT-SE 100 rose 2.5 percent, and France's CAC-40 rose 1.0 percent.