logo
Tue, Mar 06, 2001 EST
fundsnav.gif (2552 bytes)
registration
account management
business home
home

Stocks Move Higher as Bargains Attract Buyers
By Amy Baldwin   Associated Press
  E-mail This Story

NEW YORK — Stocks advanced Monday as investors took advantage of cheaper prices and momentarily put aside their fears about the slowing economy.

The advance came despite word from more companies that future profits will continue to be weak. Analysts are split over whether that means the market is poised to rally or whether investors are just temporarily bargain hunting.

The Dow Jones industrial average rose 95.99 points to close at 10,562.30. Volume was light as many traders stayed home due to the winter storm in the Northeast.

Broader market indicators also closed higher. The Nasdaq composite index closed up 25.30 points at 2,142.93. The Standard & Poor's 500 index gained 7.23 points to 1,241.41.

Much of the tech advance came from the semiconductor sector, where Altera gained $1.63 at $27.50 and Vitesse Semiconductor rose $1.25 to $39.06. Semiconductors traded higher although several companies including Vitesse curtailed their earnings expectations. The sector also overcame downgrades of 15 stocks including Altera by Prudential Securities, which believes the shares will bottom out in the second or third quarter.

The trend of surmounting bad news extended further than semiconductors. Software maker Oracle, which issued a profit warning on Thursday and fell 21 percent on Friday, made a slight advance, up 6 cents at $16.94.

As companies defy bad news, the chances of a longer-lasting market rally increase, said Arthur Hogan, chief market analyst for Jefferies & Co.

"We have finally come to the point where we have a price-news divergence meaning stocks don't go down on bad news," Hogan said. "That is typical of a (market) bottom."

Not all stocks, however, were able to shake off the news of the day. Coca-Cola, a Dow stock, tumbled $2.85 to $49.70 after the company announced a management reorganization plan on Sunday that included the elimination of the president's post.

A bit of optimism about the economy could be seen in blue chip dealings. Investors bid down the safer stocks like drug issues after months of running them up when riskier tech sectors fell out of favor. Merck lost 98 cents to trade at $79.17.

Meanwhile, the market sent more economically sensitive blue chips higher. Consumer cyclical stocks, called by that name because they suffer when the economy slows down, led the Dow's move up. Caterpillar climbed $1.75 to $44.43, and General Motors gained 81 cents at $55.11.

However, some analysts don't expect any gains to last. They say investors are still cautious and call market advances "trading rallies" spurred only by cheaper prices. The consensus on Wall Street is that selloffs will continue to be the dominant trading pattern as the market faces more bad news about earnings and how much the economy has weakened.

"It's a rally in the Dow and in (consumer) cyclicals. That's about it though," said Gary Kaltbaum, a technical analyst for First Union Securities. "I don't count it as much as anything. Volume is light because of the snowstorm."

Advancing issues outnumbered decliners nearly 8 to 7 on the New York Stock Exchange. Volume was 723.28 million shares, well below 1.02 billion at the same point Friday.

The Russell 2000 index was down 0.50 at 476.38.

More Marketwire More MarketWire News Top of Page


© 2000, News Digital Media, Inc. d/b/a Fox News Online
All rights reserved. Fox News is a registered trademark of 20th Century Fox Film Corp.
Data from Thomson Financial Interactive is subject to the following Privacy Statement
© 2000 Associated Press. All rights reserved.
This material may not be published, broadcast, rewritten, or redistributed.
© 2000 Reuters Ltd. All rights reserved