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IBM upgrade keeps
tech stocks rolling
NEW YORK >> Wall Street extended its advance into a sixth straight week yesterday after a brokerage upgrade of IBM raised investor expectations of a rebounding economy. The Nasdaq composite index reached an 18-month high.
"What's driving things today is you're continuing to see upgrades and better earnings out of technology from companies such as IBM," said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston.
"You've got a lot of people who missed the early part of the rally back in March and April who are playing catch-up," he added. "That's helped by the fact that we've had unambivalently good economic numbers with the exception of the labor front."
The Nasdaq gained 30.38, or 1.6 percent, to 1,888.62, following a weekly advance of 2.6 percent. It was the highest closing level since March 12, 2002, when the tech-focused index stood at 1,897.12.
The blue chips also finished higher. The Dow Jones industrial average closed up 82.95, or 0.9 percent, at 9,586.29. Last week, the blue chips gained 0.9 percent to post their fifth straight winning week despite an 84-point loss Friday on a weak employment report.
And the Standard & Poor's 500 index rose 10.25, or 1 percent, to 1,031.64, having risen 1.3 percent last week. Yesterday's close represented a fresh 14-month high; it was the best close since June 18, 2002. Advancing issues beat decliners 5 to 2 on the New York Stock Exchange. Consolidated volume was somewhat light at 1.72 billion shares, compared with 1.91 billion traded Friday.
The Russell 2000 index rose 8.26, or 1.6 percent, to 517.13. The NYSE composite index gained 57.92, or 1 percent, to 5,805.60. The American Stock Exchange composite index advanced 5.87, or 0.6 percent, to 996.75.
The two-year note fell 1/32 to 100 1/2, with its yield rising to 1.73 percent. The 10-year note fell 932 to 98 2932, with its yield increasing to 4.39 percent.
International Business Machines Corp. climbed $2.15 to $89.10 after Credit Suisse First Boston upgraded the computer company's stock rating to "outperform" from "neutral."
Stocks have climbed in recent weeks on growing investor expectations of a strong economic recovery. But analysts caution that the market, having advanced quickly, might be due for a pullback, particularly when companies begin issuing earnings warnings later this month.
RF Micro Devices Inc. surged $1.45 to $10.46 after the technology company raised its fiscal second-quarter outlook, citing improved products and cost-cutting.
Financial companies Goldman Sachs & Co. and Lehman Brothers Holdings Inc. also got a lift after Merrill Lynch & Co. raised third-quarter estimates on the firms. Goldman increased 39 cents to $91.35, while Lehman rose 32 cents to $68.08.
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