NEW YORK >> Blue-chip stocks rose today -- giving the Dow Jones industrials their first two-day advance in nearly a month -- as investors again searched for bargains after weeks of declines. But tech stocks were left behind, falling in response to two disappointing economic reports.
Dows jumps 113.41 to
surge past 10,000
By Lisa Singhania
Despite the Dow's advance -- its second straight triple-digit gain -- the session had a cautious tone, reflecting investors' persistent doubts about the strength of the economy. And analysts again doubted that the upturn would last because lower prices haven't been enough to sustain the market; investors are still demanding solid evidence that business is improving.
"The market is trying to come back as some investors look at it as oversold. ... But this is nothing more than a bear market rally," said Christopher Johnson, managing quantitative analyst at Schaeffer's Investment Research in Cincinnati.
The Dow closed up 113.41 at 10,059.63, recovering from an earlier drop of 115.49. The blue chips, which rallied 126.35 yesterday, had not risen for two straight sessions since April 4-5.
The broader market finished mixed. The Nasdaq composite index stumbled 10.70 to 1,677.53, having risen 31.30 in the previous session. The Standard & Poor's 500 index advanced 9.54 to 1,086.46.
Advancers outpaced decliners 3 to 2 on the New York Stock Exchange, with 1,923 up, 1,216 down and 215 unchanged. Volume was 1.44 billion shares.
The NYSE composite index rose 6.17 to 580.35, the American Stock Exchange composite index jumped 11.37 to 942.24 and the Russell 2000 index inched up 0.16 to 510.83.
The Treasury's 2-year note gained 1/32 to 100 1 1/32; its yield slipped 2 basis points to 3.20 percent. The 10-year note rose 532 to 98 1732; its yield fell 2 basis points to 5.06 percent. The 30-year bond gained 1 1/32 to 97 1/4; its yield lost 2 basis points to 5.57 percent.
Lower prices were the only lure for investors today.
The market was disappointed by a report that said manufacturing activity grew at a slower-than expected pace in April. The Institute for Supply Management said its index of business activity slipped to 53.9, below the reading of 55.0 that analysts were expecting. A level above 50 indicates growth, while a figure below that points to contraction.
Another blow came from the Commerce Department, which reported that construction spending dipped 0.9 percent in March due to a decline in big government projects including highways and schools.
The reports conflicted with earlier, more upbeat economic data, such as Friday's report that the nation's gross domestic product grew at an annual rate of 5.8 percent in the first quarter. Analysts said investors are waiting for positive reports to decisively outweigh negative ones before they commit to the stock market.
"What they want to see is consistently strong economic numbers and strong earning reports, or at least not negative ones. They are not seeing all this all at once," said Stephen Carl, principal and head of equity trading at The Williams Capital Group. "They are seeing spotty economic reports, and good ones once in a while. They are seeing some good earnings but also negative and neutral earnings."
Dow industrial Procter & Gamble rose $1.54 to $91.80 after the maker of Tide and Crest reported fiscal third-quarter earnings a penny higher than analysts had anticipated. Kenneth Cole, whose profits also beat expectations by a cent, climbed $1 to $28.
Alcoa, a Dow stock, advanced 12 cents to $34 after Merrill Lynch raised its rating on the aluminum products maker.
Technology was the weak spot, which has been the case during much of the recent sell-off and which is not surprising given that high-techs are expected to be the last companies to emerge from recession.
Sun Microsystems fell $1.21 to $6.97 after President and Chief Operating Officer Ed Zander announced his retirement after more than 15 years at the network hardware and software company.
Meanwhile, Kmart, which is in Chapter 11 reorganization bankruptcy, said it is reviewing its accounting methods, which could result in a change to its already reported 2001 quarterly earnings.
Kmart asked for an extension to file its annual report with the Securities and Exchange Commission, saying its new management needs more time to examine its accounting. Kmart was to have filed the 10K yesterday.
Analysts expressed concern that the delay was because of an investigation.
In today's trading on the New York Stock Exchange, Kmart shares closed down 9 cents to $1.25.