Closing Market Report

Star-Bulletin news services

Thursday, December 23, 1999

Santa brings records
to Wall Street

The record-breaking Nasdaq
flirts with 4,000 while the Dow
and S&P 500 hit all-time highs

NEW YORK -- The red-hot rally in technology and Internet stocks briefly boosted the Nasdaq composite index above 4,000 for the first time today, less than two months after it first crossed 3,000.

The buying spree also lifted the Dow Jones industrial average into record territory for the first time since August, rising more than 200 points, and lifted the Standard & Poor's 500-stock index to another new high.

The so-called Santa Claus rally on the last trading day before Christmas in large part reflected a euphoria over the prospects for technology and Internet companies at a time when the U.S. economy is just a month away from matching the longest expansion ever, with unemployment is at a 29-year low.

The Nasdaq composite rose as high as 4,001.63 shortly after noon on Wall Street. It pulled back, but still closed up 32.14 at 3,969.44, its sixth straight record and its 58th record close of 1999.

The tech-dominated index, driven higher by enthusiasm about the Internet's ever-expanding role in the economy, has now gained 81 percent for the year. It was only on Nov. 3 that the Nasdaq closed above 3,000 for the first time.

The Dow rose 202.16, or by 1.8 percent, to close at a record 11,405.76. The famed barometer of the 30 major companies is up 24 percent for the year, cruising toward a fifth straight year of double-digit gains.

The previous record close of 11,326.04 was set Aug. 25.

The S&P 500 rose 22.21, or 1.55 percent, to close ar 1,458.34 and putting the index up 18.64 percent so far in 1999.

"This is what happens in the pre-holiday atmosphere when you have a lighter volume but the money keeps flowing in from mutual funds, pension funds and end-of-year bonuses," said Larry Watchtel, market analyst at Prudential Securities.

The stock market will be closed tomorrow in observance of the Christmas holiday.

Advancers led decliners by a 5-to-3 margin on the New York Stock Exchange, with 1,909 up, 1,139 down and 495 unchanged. NYSE volume totaled 734 million shares vs. 849.97 million yesterday.

The NYSE composite rose 9.90 to 644.06; the American Stock Exchange The Russell 2000 index of smaller companies rose 4.49 to 482.43.

Major indexes also closed at record heights in Britain, France and Germany.

Today's surge followed the release of more data suggesting that the economy continues to growing at a moderate pace that may not spark inflation.

The Commerce Department reported that personal income, which includes wages, interest and government benefits, rose by 0.4 percent last month -- high than analysts expected, but the slowest pace since August. Rising wages and other benefits can spark inflation because they often account for two-third's of a product's price.

In a separate report, the Commerce Department said orders to U.S. factories for big-ticket manufactured goods rose 1.2 percent in November, the first gain since August.

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