Nasdaq cracks 4,000
The tech-heavy index, ahead 84% this year,Associated Press
overshadows highs by the Dow and S&P 500
NEW YORK -- Technology stocks, the dominant force on Wall Street this year, propelled the Nasdaq composite index to its first close above 4,000 today and also boosted broader market indicators to records.
The Nasdaq, which lists most of the world's leading technology companies, finished above 4,000 just 38 trading days after its first close above 3,000. The Nasdaq has dramatically outperformed the Standard & Poor's 500 and the Dow Jones industrials, which set their latest records on the slimmest of gains.
The Dow rose 7.95 to close at 11,484.66. The blue-chip index eased past its previous record of 11,476.71, set yesterday. The Nasdaq composite rose 69.34 to 4,041.45, the 60th record close for the index in 1999. The S&P 500 rose 5.80 to a record 1,463.46. Year to date, the Nasdaq is up 84 percent, compared with 25 percent for the Dow and 19 percent for the S&P 500.
Advancers beat decliners by a nearly 2-to-1 margin on the New York Stock Exchange, with 1,991 up, 1,090 down and 466 unchanged. NYSE volume totaled 573.73 million shares vs. 661.71 million yesterday.
The Russell 2000 index of smaller companies rose 8.53 to 497.01, also a record. The NYSE composite index gained 1.73 to 646.03 and the American Stock Exchange index gained 9.33 to 851.86.
The price of the 30-year Treasury bond, meanwhile, rose 12/32, or $3.75 per $1,000 face value; its yield fell 3 basis points to 6.44 percent, not far from the 6.48 percent level reached yesterday -- the highest since Sept. 15, 1997. Two-year note yields fell 2 basis points to 6.19 percent.
Holding fast to a pattern that has troubled analysts this year, the Nasdaq's gains came largely from one stock: Qualcomm, which rose more than 100 points after a Wall Street analyst suggested its shares should reach 1,000 within 12 months.
Qualcomm developed code division multiple access technology, which is becoming the dominant technology used in cellular phones and wireless communications.
"We believe it is an appropriate way to invest in the long-term growth trends of wireless and data," PaineWebber analyst Walter Piecyk said in a research note.
Qualcomm is already the best-performing stock in the S&P 500 this year, with a return of 1,846 percent. The stock has padded its stunning gains in the past few weeks as money managers worked to add the year's best performers to their portfolios. That yearend buying, also known as window-dressing, has helped the Nasdaq set 14 new closing records since the beginning of December, largely on the strength of its biggest stocks.
"Many people have achieved very large gains in technology stocks, and may be reluctant to capture those gains before the end of the year," said Eugene E. Peroni Jr., director of equity research at John Nuveen & Co.
Still, a handful of other technology stocks posted solid gains. DoubleClick, an Internet advertising firm, rose sharply after Donaldson, Lufkin & Jenrette said shares should reach 300 within six to 12 months.
Most online brokerages rose after Charles Schwab Corp. said it expects to beat analysts' profit forecasts for the fourth quarter. Schwab rose after saying that trading volume in December was the best ever.
Ameritrade and ETrade also gained, as analysts said the online trading boom likely extended well beyond Schwab.
The technology frenzy extended to blue-chip stocks as well. Hewlett Packard rose.
"We are in a second industrial revolution, which is growing out of technology, telecommunications and the Internet," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Co. is St. Louis.
American Express was the strongest Dow component. DuPont also gained, heartening analysts who have worried that technology has dominated the market to the exclusion of any other sector.
"We're seeing some good rotation, which is a nice change of pace," Peroni said.
Today's rally occurred in a quiet session. Volume has tapered off throughout the week as many Wall Street professionals extend their Christmas vacations or begin their New Year's holiday early. Financial markets will close at 1 p.m. on Friday.
The market appeared largely unaffected by a report that the Conference Board's Index of Leading Economic Indicators, a gauge of future economic activity, rose to a 40-year high in November. The report was in line with economists' expectations.