The Nasdaq composite index soared to its first close above 5,000 Thursday, with telecommunication and Internet stocks leading the charge.
According to preliminary calculations, the Nasdaq composite
index rose 150.13 or 3 percent to close at 5,047.39, the fifth-biggest gain ever. The Nasdaq closed above the 4,000 barrier only about two months ago.
"It's kind of like the dam burst," said Trude Latimer, an
independent market strategist in Charlottesville, Va., referring
to the late-day rally that spread across most sectors. "As far
as the broad market, the Nasdaq led the Dow."
But the Dow Jones industrial average also ended the day strong. It dithered in and out of negative territory all day until the final hour of trading when it jumped 154.20 to 10,010.73.
Broader stock indicators also closed higher. The Standard & Poor's 500 index finished up 34.99 points, or 2.56 percent, at 1,401.69. The small-cap Russell 2000 was up 11.37 points, or 1.91 percent, at 606.05.
Overall, investors snapped up shares of the
computer networking company Cisco Systems. It gained 6-15/16 to 139-5/16, its highest close ever.
So far this year, the Nasdaq, dominated by technology stocks, is
up 24 percent, while the Dow, which has been depressed by concerns
about industrial company profits, is down 13 percent.
But technology stocks that trade on the New York Stock Exchange also
rose today. Leading the Dow up was Hewlett-Packard Co., which gained 11 to 151-7/8. It rose as its spinoff, Agilent
Technologies held an analyst meeting in California.
Agilent finished 7-7/8 higher at 153.
Investors continue to sink money into high-tech issues, including chip makers, wireless providers and Internet companies, because these "new economy" stocks are predicted to hold up better than "old economy" stocks if interest rates rise.
But pharmaceuticals shares also were among the winners, with the
stocks more than 5 percent higher, according to the American
Stock Exchange's drugs index. Analysts said the sector benefited from general economic uncertainty as investors fled to traditional "safe
Bristol-Myers Squibb Co led the pack, advancing
5-7/8 to 53-3/4 in heavy trading on the New York Stock Exchange.
Merck & Co pulled ahead by 4-1/8 to 60-3/4, while Eli
Lilly gained 3-9/16 to 60.
In economic news, the U.S. Labor Department reported that
280,000 people filed new unemployment claims in the week ending
March 4, which analysts said was in line with expectations and
continues to indicate a tight labor market.
Merrill Lynch said the jobless claims ontinue to paint
the picture of a tight labor market.
"Robust jobs gains, which have driven down the unemployment
rate, continue to be (the Federal Reserve's) chief concern. It
appears the underlying economic growth remains too strong for
the Fed," Merrill said in a research note.
Merrill said it expects the Fed to continue its
anti-inflation campaign with a 25-basis-point hike in interest
rates at both the Fed's March 21 and May 16 meetings.
The 30-year U.S. Treasury bond was up 3/32 with a yield of
6.16 percent and the 10-year note was up 9/32 with a yield of
6.35 percent after the U.S. Treasury bought back its debt for
the first time in 70 years. Traders said it garnered reasonable
prices following good interest from holders of government paper,
which boded well for future buybacks.
Gregory A. Nie, a technical analyst at First Union
Securities Inc. in Chicago, said the late rally bodes well for
Friday. "I see it steady to better tomorrow, to soothe the big
jolt and the damage we saw," he said. "This was a good day but
not a great day."
Reuters contributed to this report