Nasdaq Up 151; Dow Up 108
Jun. 01, 2000
NEW YORK (AP) _ Stocks rallied Thursday as investors took heart in the latest signs that rising interest rates are successfully keeping inflation at bay. Buyers dipped into the technology sector, snapping up shares of market leaders that have been battered in the past few weeks.
The technology-focused Nasdaq composite index was up 151.46, or by 4.5 percent in afternoon trading, at 3,552.37. The Nasdaq soared a record 7.9 percent on Tuesday on bargain-hunting before giving up some ground on Wednesday.
The Dow Jones industrial average was up 107.94, or 1.3 percent, at 10,630.27, and broader stock indicators were also higher.
The gains came as trading volume rose from the moderate pace of earlier this week.
In addition to renewed interest in technology shares, the market has gained strength as a string of economic reports suggests the runaway pace of the nation's economic growth is slowing a bit. On Thursday morning, many of the nation's retailers reported lackluster sales for May, indicating that six interest-rate increases by the Federal Reserve are beginning to quell consumer spending.
Later, the National Association of Purchasing Management issued a report that growth in the industrial economy slowed during May. The report also said inflationary pressures for industrial supplies appear to have peaked in March.
The report could persuade the Fed to raise interest rates by a slim quarter-percentage point _ or perhaps to hold them steady _ at its next meeting on June 27-28, said Michael Moran, chief economist at Daiwa Securities America.
Still, analysts say the most crucial report will be the Labor Department's May employment report, due out before the start of trading Friday. Any signs of slower growth _ whether in a higher unemployment rate or lower wage pressures _ should enable the market to extend its efforts to rally.
The Fed has viewed the plummeting jobless rate as a sign that companies would have to sharply raise wages and benefits to retain workers. That could eventually force them to raise prices, setting a stage for renewed inflation.