Stocks Move Upward; Dow Up 99.10
Oct. 08, 1999
NEW YORK (AP) _ Stocks rose today as investors brushed off concerns about rising inflation and turned their focus toward the positive earnings news expected next week.
In afternoon trading on Wall Street, the Dow Jones industrial average was up 99.10 at 10,636.15, erasing all of Thursday's 51-point loss.
Broader stock indicators also rose. The Standard & Poor's 500 index was up 15.58 at 1,333.22. While the Nasdaq composite index was up 14.60 at 2,875.30, its gains were stemmed by some weakness in technology stocks.
If stocks continued their gains through the end of the day, all three indexes would be on track to have their best weekly gains since the first week in July.
Stocks turned higher this afternoon after fluctuating most of the morning as investors tried to determine whether the government's employment report signaled that inflation was accelerating.
Rising oil prices and some bargain hunting helped lift stocks from their earlier slump. In addition, investors expected another strong earnings season.
``The Fed may not be finished raising interest rates, but for now, the market isn't focused on that,'' said Alan Ackerman, senior vice president at Fahnestock & Co.
Stocks seesawed this morning after the Labor Department reported that employers cut their payrolls by 8,000 jobs in September, the first drop since January 1996. Analysts had expected companies to add 220,000 jobs.
The decline was mostly attributed to Hurricane Floyd, which cut into hiring at companies along the East Coast.
But even with the decline in jobs, wage pressures rose in September. Average hourly earnings, a key gauge of inflation pressures, grew by 0.5 percent to $13.37 in September, much sharper than the 0.2 percent increase in August.
The report sent mixed signals to the stock market. There was relief over the decline in job growth but concern that the rising wages could mean inflation is picking up momentum.
Investors worry that any signs of rising inflation may cause the Federal Reserve to raise interest rates for the third time this year to keep the economy from overheating and to head off a resurgence of inflation.
``The market reacted to the upside and the downside of the jobs report,'' Ricky Harrington, technical analyst at Wachovia Securities in Charlotte, N.C. ``There is a lot of uncertainty in the market and this report just shows the nervous atmosphere that is out there.''
Hugh Johnson, chief investment officer at First Albany Corp., noted that there was a meaningful shift this week in what stocks investors were buying.
Instead of technology and Internet shares, which have led the market in recent months, there was lots of buying of big names in other sectors, namely consumer, financial, drug and transportation stocks.
``There has been a shift from those stocks that have done very well recently but are pricey to those where the performance hasn't been great but they are undervalued,'' he said.
Johnson also said that the small-cap stocks haven't been performing as well today as the broader market. That was reflected in the Russell 2000 index, which was down 1.25 at 426.82 today.
Johnson & Johnson led the Dow higher, rising 4 1/16 to 98 5/16. American Express, Wal-Mart and General Electric also rose today.
Xerox was one of the biggest losers, falling 10 11/16 to 32 1/16 after the copier maker warned third-quarter earnings would be lower than analyst expectations.
Oil company stocks, including Atlantic Richfield and Royal Dutch Shell, also were under pressure amid a slump in crude oil prices.
Declining issues outnumbered advancers by a narrow margin on the New York Stock Exchange, where volume came to 725.90 million shares, up from 643.76 million shares on Thursday.