Bargain hunting in technology lifted the stock market moderately higher today, despite more mixed economic news and a revenue warning from Nortel. Stocks rise despite mixed
economic dataBy Lisa Singhania
Associated PressAnalysts said the less-than-dismal consumer spending and sentiment data gave investors hope that a turnaround would begin in early 2002.
"Wall Street can't wait for people to grab it by the lapels and say, 'Buy now,' " said Larry Wachtel, market analyst at Prudential Securities. "People are betting a recovery will come quicker than we've thought. This is anticipatory buying."
The Dow Jones industrial average rose 50.16 at 10,035.34. The Standard & Poor's 500 index gained 4.96 to 1,144.89, while the technology-focused Nasdaq composite index gained 27.29 at 1,945.83. For the week, the Dow gained 2.2 percent, the Nasdaq fell 0.4 percent and the S&P gained 1.9 percent.
Advancers led decliners nearly 2 to 1 on the New York Stock Exchange, with 2,060 up, 1,099 down and 197 unchanged. Volume was 1.69 billion shares vs. 1.09 billion yesterday.
The heavy volume was related to today being what's called a triple-witching session -- the quarterly expiration of index futures and index and stock options. Historically, triple-witching weeks are volatile as fund managers sell and buy stocks to adjust their portfolios.
The NYSE composite index rose 2.44 to 585.70, the American Stock Exchange composite index gained 4.32 to 830.15 and the Russell 2000 index jumped 9.94 to 484.02.
The Treasury's 2-year note fell 3/32 to 99 - 25/32; its yield rose 5 basis points to 3.12 percent. The 10-year note fell 13/32 to 99 - 11/32; its yield gained 6 basis points to 5.08 percent. The 30-year bond fell 1/2 to 98 -30/32; its yield gained 3 basis points to 5.45 percent.
Hawaiian Airlines, whose stock jumped more than 24 percent yesterday after announcing late Wednesday it was merging with privately held rival carrier Aloha Airlines, continued to fly high today as its stock soared 20.3 percent. Hawaiian's shares rose 63 cents to end at a 52-week closing high of $3.85. The stock hit $4.05 intraday yesterday.
Meanwhile, the Commerce Department reported today that consumers reduced their spending in November by 0.7 percent, a weak, but slightly better-than-expected performance. Incomes fell for the third straight month as the nation's unemployment rate climbed to a six-year high.
Still, after a week of earnings and revenue warnings and tech selloffs, the market welcomed the news. Wall Street was also pleased with a Dow Jones News report that the University of Michigan December consumer sentiment index had moved higher again, another indicator of strength.
"People are interpreting this economic data as meaning that the economy and business are bouncing along the bottom," said Christopher Wolfe, equity market strategist for J.P. Morgan Private Bank. "So people are looking at higher risk stocks again."
In trading today, investors flocked to shares of tech companies, including Juniper Networks, that they had spurned earlier this week. Juniper rose $1.13 to $19.98, rebounding from losses triggered by an earnings warning yesterday and general profit-taking.
Nortel rose 77 cents to $7.13, after lowering its fourth-quarter revenue estimates but saying its loss would be narrower than expected.
Wall Street was less forgiving of financial shares. J.P. Morgan Chase dropped 77 cents to $35.75 on continuing worries about its $2.6 billion exposure stemming from the collapse of Enron. The figure is more than double what it previously disclosed -- including nearly $1 billion it says it is owed by insurance companies.
Also today, the Commerce Department said that the U.S. economy, or gross domestic product, shrunk at an annual rate of 1.3 percent, a bigger drop than the 1.1 percent the government previously estimated. Although GDP is considered the broadest measure of the economy's heath, these figures got a muted reception because the third quarter ended months ago -- and Wall Street had already written off the quarter as a disaster.