Things got back to normal today as the Nasdaq set a new record, volume soared and some sectors that have recently been market darlings were sweet as pie again.
After blowing away the Nasdaq Composite Index and the Russell 2000 yesterday, things were back to what passes as normal in the market today as the Dow Jones Industrial Average and the S&P; 500 lagged their resurgent index siblings, despite posting solid advances.
Leading the way among major stock proxies percentage-wise was the Russell 2000, which soared 20.03, or 3.6%, to 577.71, and closed at an all-time high. Analysts pointed out that the Russell's advance was helped in part by gains in components like BroadVision (BVSN:Nasdaq), which qualified for small-cap status last year when the Russell went through its annual makeover, is a small-fry no more.
BroadVision now boasts a market cap of about $20 billion, hardly qualifying it as a small-cap. Analysts have noted that a good portion of the Russell's advance recently has been thanks to moves in its "big-cap" members like BroadVision.
The Nasdaq Comp hopped 118.84, or 2.6%, to 4696.69, and closed at an all-time high, its 12th of the year. The Nasdaq also set a volume record with roughly 2.07 billion shares changing hands. It was the second time volume has topped 2 billion on the Nasdaq.
Nuclear-fueled 3Com (COMS:Nasdaq) soared ahead of the initial public offering of its Palm (PALM:NYSE) division, which raised its price range to $30-$32 a share from the original $14-$16 a share. 3Com plans to shed the remainder of its Palm holdings -- about 532 million shares -- by distributing them to existing shareholders. 3Com hopped 18 15/16, or 24%, to 98.
Semiconductor stocks exploded higher on some bullish analyst actions on the sector. The Philadelphia Stock Exchange Semiconductor Index soared 9.8%. Rambus (RMBS:Nasdaq) soared an eye-popping 60 5/8, or 25.2%, to 301 5/8.
Rambus said that Hyundai and Infineon are joining Samsung, NEC and Toshiba in volume production of Rambus memory products. Rambus was the biggest point gainer on the Nasdaq today.
The Nasdaq 100 surged 2.5% to 4266.94.
TheStreet.com Internet Sector index rallied 28.31, or 2.5%, to 1182.86. The aforementioned BroadVision was the biggest power behind the DOT's surge. BroadVision soared 19 1/2, or 8.4%, to 252 9/16.
TheStreet.com New Tech 30 jumped 28.93, or 3.7%, to 811.04. The TSC New Tech 30, unveiled Jan. 5, is a market-cap-weighted index focused on tracking the most scorching part of the market, the magnet for Wall Street's hot money.
Big gains in telecommunications and biotech stocks -- along with the whopping advance in semiconductor issues -- also helped juice up the Comp. The Nasdaq Telecommunications Index rallied 1.8%, while the Nasdaq Biotechnology Index gained 4%.
"You can't deny the trend in the Nasdaq," said Paul Cherney, market analyst at S&P; MarketScope. Cherney was heartened by the positive breadth in the Nasdaq. "Right now, I can't do anything but be positive on the Nasdaq."
The analyst, however, was less sanguine about the Dow, echoing skepticism on Wall Street yesterday about the blue-chip average's rally.
"We're having a glorified short-covering rally," which typically lasts about four days, meaning there might be two more days of gains left after today, said Cherney. The analyst said there is legitimate bargain hunting by value-types going on in the Dow, however, "you can't rule out" an attempt to retest the lows of Friday.
The Dow advanced 89.66, or 0.9%, to 10,128.31. Hewlett-Packard (HWP:NYSE) and AT&T; (T:NYSE) were the two biggest positive influences on the Dow.
Elsewhere, the S&P; 500 gained 18.36, or 1.4%, to 1366.41.
More of the Same on the Way
As the market's trailblazers reasserted their leadership after a brief respite, some market strategists see more of the same over the short-term at least.
Over the next week, Tony Dwyer, chief market strategist at Kirlin Holdings, said he's expecting the old economy stocks to resume their travels to the downside and the new economy stocks to continue with their momentum on the upside.
And you can count Dwyer among those skeptical of the Dow's rebound from its recent awful performance.
Dwyer said the Dow has seen a nice bounce after its recent troubles, highlighted by Friday's close below 10,000. However, he said the volume and breadth of the advance over the last couple of days has not been "too compelling."
"This is a good, oversold rally," Dwyer said, but he doesn't expect it to last because he doesn't think the Dow has bottomed out because it hasn't achieved a climactic low.
Looking ahead, the latter part of the week holds some key events for the market, the strategist said. The European Central Bank will get together to discuss interest rates, and on Friday back here in the U.S., the Labor Department will release on Friday the February employment report. Economists are projecting nonfarm payrolls to rise 206,000, with the unemployment rate holding steady at 4%, according to a Reuters poll
Economic news today didn't influence trading much in either equities or fixed income. The February Chicago Purchasing Managers' Index rose to 56.7 from 55.6 in January. Economists polled by Reuters had forecast a rise to 57.5, on average. Meanwhile, the Conference Board's Consumer Confidence Index fell to 141.8 in February from January's record high of 144.7.
Tomorrow, traders will get a look at the National Association of Purchasing Management's Purchasing Managers' Index. Economists surveyed by Reuters are expecting the index to come in at 56.6.
In the fixed-income world, the 10-year note was flat at 100 19/32, yielding 6.418%, while the 30-year Treasury bond was up 17/32 to 101 11/32, putting its yield at 6.15%. (For more on the fixed-income market, see today's Bond Focus.)
Sector-wise in the market, there were a host of winning sectors, reflecting the decidedly positive breadth in the market. The American Stock Exchange Broker/Dealer Index surged almost 6%; the Philadelphia Stock Exchange Oil Service Index flew 6%; the S&P; Retail Index soared 3.4%; the TheStreet.com E-Finance Index exploded up 9.3%.
In New York Stock Exchange trading, 1.2 billion shares were exchanged while advancing stocks beat decliners 1,809 to 1,179. In Nasdaq action, 2.07 billion shares traded while winners defeated losers 2,644 to 1,606. New 52-week lows beat new highs 146 to 80 on the NYSE while new highs beat new lows 415 to 106 in over-the-counter trading.
Among other indices, the Dow Jones Utility Average inched up fractionally to 288.48; the Dow Jones Transportation Average gained 27.08, or 1.2%, to 2388.86; while the American Stock Exchange Composite Index rose 8.85, or 0.9%, to 973.23.