Related topics

Dow Ends Up 112; Nasdaq Gains 103

August 31, 2000

NEW YORK (AP) _ Investors optimistic that the U.S. economy is growing at a healthy but non-inflationary pace sent stocks broadly higher Thursday. The Dow Jones industrial average and Nasdaq composite index each gained more than 100 points.

The Dow rose 112.09 to 11,215.10, erasing Wednesday’s 112-point drop. The average was up nearly 200 points during afternoon trading Thursday, but some of its gains were lost in a late burst of profit-taking.

Broader stock indicators also advanced. The Nasdaq composite index was up 102.54 at 4,206.35, and the Standard & Poor’s 500 index was up 15.09 at 1,517.68.

Some analysts expressed surprise at Thursday’s surge, but said it was a sign of confidence in the market. Late August, especially the days leading up to the Labor Day weekend, are traditionally a slow time for Wall Street.

``It’s just optimism,″ said Richard Cripps, chief market strategist for Legg Mason of Baltimore. ``We’re looking at a higher market in the fall ... driven by the idea that the Fed is likely to not increase interest rates.″

The Federal Reserve has raised interest rates six times over the past 14 months as part of a strategy to cool down the economy and slow inflation. Last week, it passed on a chance to raise rates again, and it is not expected to consider the issue again until after the November election.

Also Thursday, the government said orders to U.S. factories posted their biggest-ever one-month drop, further proof that the economy is slowing, economists said.

``I think investors feel that as ... they come back from vacation, they’re going to see interest rates down, relatively benign inflation, double-digit corporate earnings and feel very, very good about the economy,″ said Donald Berdine, chief investment officer for PNC Advisors in Pittsburgh.

Technology and financial stocks were among the most active Thursday.

``You’re seeing technology stocks strengthen: Intel, Dell and Microsoft are all up,″ said Greg Nie, senior vice president for technical research at First Union Securities in Chicago. ``The Dow is also being helped in particular by J.P. Morgan.″

Morgan rose $16.13 to $167.19. Financial stocks were in favor Thursday after Wednesday’s announcement that Credit Suisse First Boston planned to buy Donald Lufkin & Jenrette for $11.5 billion.

Intel rose $1.38 to $74.88; Dell climbed $3.69 to $43.63. Microsoft was up most of Thursday but ended down 18.70 cents at $69.81. Gateway jumped $2.25 to $68.10.

Stocks might have been even higher if not for some disappointing retail sales numbers, which would seem to confirm analysts’ suspicions that second-half consumer spending is on the decline.

Shares of Gap Inc. fell $3.19 to $22.38, a day after the casual clothing retailer reported a 14 percent decline in sales at stores open at least a year during August.

Sales were stronger at Sears and Wal-Mart, but their stocks slipped lower. Sears dropped 43.70 cents to $31.19, and Wal-Mart fell 18.8 cents to $48.

Most department stores including J.C. Penney, which dropped $1.19 to $14 Thursday, continued to flail.

On Friday, the federal government was expected to release employment figures, which could provide more information on how fast the economy is growing. The National Association of Purchasing Mangement report on the manufacturing sector was also due out.

Advancing issues outnumbered decliners by a 3-to-2 margin on the New York Stock Exchange. Volume on the floor of the Big Board came to 1.06 billion shares as of 4 p.m., up from 813.26 million in the previous session.

Overseas, Japan’s Nikkei stock average fell 1.40 percent. Germany’s DAX index was up 0.43 percent, Britain’s FT-SE 100 was up 0.87 percent, and France’s CAC-40 was down 0.13 percent.

The Russell 2000 index, which reflects the performance of smaller-company stocks, rose 5.56 to 537.89.


On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Update hourly