Stocks powered ahead Thursday, as investors scooped up biotech shares and turned their focus to key employment data that could give hints to the extent of future interest rate hikes.
The Dow Jones industrial average ended up 80.35 points, at
11,114.27, while the Nasdaq moved up 99.79 points at 4,269.01.
On Friday, the government will release U.S. March jobs data. Economists in a Reuters survey estimated payrolls
rose by 376,000 in March after a softer-than-expected 43,000 in
the prior month.
On Thursday, biotechnology shares rallied strongly, led by PE
Corp.-Celera Genomic Group, which saw its stock soar
after the company said it had successfully finished the first
step of sequencing a human genome.
"Biotech is certainly leading the pack," said John
Davidson, chief investment officer at Orbitex Management.
Thursday's gain for the biotech index comes on top of a 6.31
percent rise on Wednesday, after President Clinton reassured the
industry its commercial gene discoveries could be patented.
The boost on Wednesday helped the sector regain ground lost
since mid-March, when stocks in the group fell after a confusing
joint statement by Clinton and British Prime Minister Tony
Blair. The two leaders said commercial gene discoveries would be
made freely available to a wider community of researchers.
Despite recent stomach-churning turns in technology shares,
investors have not lost their appetite for the high-flying
sector and are now snapping up these stocks at what some
consider discount prices, analysts said.
"Tech stocks are on the sale rack," said David Sowerby,
portfolio manager and strategist at Loomis Sayles in Detroit.
"Unequivocally, (investors) are bargain-hunting."
A drop in the stock of Internet media company Yahoo! Inc., however, marred the tech sector's shine.
Despite first quarter earnings that beat official Wall
Street projections, Yahoo! Inc shares fell amid market
disappointment that it failed to match expectations of even
Yahoo! got a brief lift off its low after influential Morgan
Stanley Dean Witter analyst Mary Meeker hiked her 2000 and 2001
earnings estimates for the company.
Clothing retailer Gap Inc. was one of the day's
biggest losers on the big board, after
saying its chief operating officer was resigning and its March
same-store sales fell 11 percent.
But investors were generally encouraged by the market's
early glimpse of first quarter earnings, analysts said.
"As we get further into earnings, we'll see the
fundamentals remain powerful and that will calm unsettled
investor nerves," said Thomas Galvin, chief investment officer
at Donaldson, Lufkin and Jenrette.
Meanwhile, Federal Reserve Vice Chairman Roger Ferguson said
the Fed cannot and should not target the stock market and that
changes in interest rates should aim only at balancing supply
He also reiterated that the Fed would be ill-advised to
contemplate any changes in margin requirements.
But Ferguson also said earlier that banks and investors
should not get carried away by the good times in the economy and
should make appropriate provisions in case of a downturn and
warned investors that many, if not most of the newer high-growth
firms are bound to fail.
The Associated Press and Reuters contributed to this report