NEW YORK >> A possible settlement in the Microsoft antitrust case and a positive outlook for the semiconductor industry gave the stock market a big lift today, outweighing drops in manufacturing activity and consumer spending and rising layoffs. Tentative Microsoft-Justice
pact lifts stocksBy Amy Baldwin
Associated PressAnalysts said the news made investors feel more secure about a business turnaround next year.
"Investors are pinning their hopes on an economic recovery in 2002, and taking anything negative they hear with a grain of salt. Expectations are so low that when there is any good news stocks will rally," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.
The Dow Jones industrial average closed up 188.76, or 2.1 percent, at 9,263.90. The Dow got its biggest boost from Microsoft, which rose $3.69 to $61.84.
The broader market also registered significant gains. The Nasdaq composite index rose 56.10, or 3.3 percent, to 1,746.30, and the Standard & Poor's 500 index advanced 24.32, or 2.3 percent, to 1,084.10. Advancers outnumbered decliners more than 2 to 1 on the New York Stock Exchange, with 2,223 up, 885 down and 191 unchanged. Volume was 1.29 billion shares.
The NYSE composite index rose 9.62 to 555.96, the American Stock Exchange composite index edge up 0.92 to 828.61 and the Russell 2000 index rose 6.71, or 1.6 percent, to 434.88.
The 30-year bond jumped for the second straight day following the Treasury department's decision yesterday to discontinue selling new issues. The 30-year bond rose 1 932 to 109 232, with its yield falling 8 basis points to 4.79 percent. The 10-year note was unchanged at 106 332; its yield remained at 4.23 percent. The two-year note fell 332 to 100 1732; its yield rose 6 basis points to 2.48 percent.
Today, the tech sector posted the biggest gains, benefitting from news that Microsoft and the Justice Department have reached a tentative agreement to settle the antitrust case. State attorneys general that sued Microsoft were reviewing terms of the deal, according to people familiar with the talks.
The computer industry has been anxiously awaiting a possible settlement and hoping it would help struggling tech companies. Likewise, today's winners included PC and software makers. Dell Computer rose 57 cents to $24.55, while Oracle advanced 61 cents to $14.17.
Semiconductors benefited from a positive forecast from the industry. Although worldwide sales of semiconductors fell 44.6 percent to $10.2 billion in September compared with a year ago, there are signs of improvement in the fourth quarter and next year, according to the Semiconductor Industry Association. Advancing on that news, Intel rose $1.52 to $25.94, and Advanced Micro Devices gained $1.66 to $11.50.
Manufacturing activity declined for the 15th consecutive month in October, pushed lower by the terrorist attacks in Washington and New York. The National Association of Purchasing Management said today its index of business activity plunged to 39.8 from 47 in September. Analysts had expecting a reading of 44.5.
Consumer spending dropped 1.8 percent drop in September, the largest decline since a decrease of the same amount in January 1987, according to the Commerce Department.