Dow Soars to Close Up 111; Nasdaq Up 42
Nov. 13, 2003
NEW YORK (AP) _ Wall Street broke out of its slump Wednesday, surging higher after a forecasted jump in semiconductor sales gave investors a reason buy after three days of declines. The Dow Jones industrials rose more than 110 points, while the Nasdaq composite index gained more than 2 percent.
Larger-cap stocks led the day, including technology bellwethers IBM Corp. and Intel Corp., which benefited from the Gartner Inc. forecast. Traders attributed some of the momentum to the week's slow start; the bond markets were closed Tuesday for Veterans Day. Many investors were returning to Wall Street after a long weekend, and with money to spend, said Brian G. Belski, fundamental market strategist at US Bancorp Piper Jaffray.
``Investors this year have conditioned themselves to buy the dip, and today they saw an opportunity,'' Belski said. ``We're in a little bit of a news vacuum ... so right now they're going to react to any news blip at all.''
The Dow ended the day up 111.04, or 1.1 percent, at 9,848.83.
The broader gauges also closed higher. The Nasdaq closed up 42.36, or 2.2 percent, at 1,973.11. The Standard & Poor's 500 index gained 11.96, or 1.1 percent, to close at 1,058.53.
The market appears to be in a ``consolidation phase ... with shallow pullbacks met with buying'' said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
``Once the consolidation phase is over I think the second leg of this bull run will commence,'' Cardillo said. ``That will probably take us up to new highs by the end of the year.''
Fueling Wednesday's tech rally, market research firm Gartner said it expects worldwide semiconductor sales to increase more than 20 percent next year. Chipmaker Intel rose 69 cents to close at $34.10. IBM Corp. also made gains, rising $1.33 to $90.69.
After the bell, Applied Materials Inc. announced earnings that beat analyst estimates by a penny, excluding charges largely due to restructuring costs. The company, which manufactures machines that make semiconductors, closed the regular session up 54 cents at $25.44, and rose more than 3 percent in after-hours trading. Tech investors were also looking forward to results from computer manufacturer Dell Inc. on Thursday.
Analysts say investors have been torn between booking gains and holding their investments in case the market moves significantly higher. Some still worry that strong earnings and economic data are already reflected in stock prices, leaving little room for growth in the months ahead.
Stocks declined during the past few sessions in the absence of economic news and as earnings season wound down. The Gartner forecast may well have been the catalyst Wall Street was looking for to break out of its decline.
Another apparent trigger for Wednesday's rally was Ford Motor Co., which shook off a credit rating downgrade by Standard & Poor's Corp. Ford closed up 75 cents, or 6.1 percent, at $13.06, after stating that the downgrade doesn't reflect the health of its business. S&P, citing poor profitability and cash flow, cut the car company's rating to one notch above junk.
Merck & Co. rose 38 cents to close at $44.25 despite news that it had scrapped a highly anticipated depression drug that failed to produce the desired results in trials.
Federated Department Stores Inc. ended the day down 52 cents at $49.65 after announcing third-quarter earnings that beat analyst expectations by a penny. The owner of Macy's and Bloomingdale's said profits were down compared to last year because of store closings and consolidation costs, but exceeded expectations thanks to improving sales.
Advancers outnumbered decliners more than 3 to 1 on the New York Stock Exchange. Consolidated volume was heavier, at 1.75 billion shares traded, compared with 1.47 billion shares Tuesday.
The Russell 2000 index, which tracks smaller company stocks, closed up 12.09, or 2.3 percent, at 540.66.
Overseas, Japan's Nikkei stock average finished 0.2 percent higher Wednesday. In Europe, France's CAC-40 was up 0.2 percent, Britain's FTSE 100 rose 0.6 percent and Germany's DAX index gained 0.5 percent.
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