Dow tops
10,000; Nasdaq
hits 2,000

Tech stocks lead the
charge as the indexes hit
multimonth highs

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By Amy Baldwin
Associated Press

NEW YORK >> Technology shares propelled the stock market higher for a second straight session today, helping to boost the Dow Jones industrials more than 220 points and giving the blue chips their first close above 10,000 since Sept. 5.

The advance also lifted the Nasdaq composite index past 2,000 for the first time since early August.

Investors were betting that the battered tech sector would trigger a new bull market, and they don't want to miss out on the market's next upturn, analysts said. Upbeat comments from Cisco Systems and Oracle fed the growing optimism.

Still, analysts said that while breaking through milestones like 10,000 or 2,000 is important to the investor's mood, they discounted today's performance as an indicator that a bull market had indeed arrived.

After a session of heavy trading, the Dow surged 220.45, or 2.2 percent, to finish at 10,114.29. The Dow, which rose 129 points yesterday, had not closed above 10,000 since Sept. 5, when it finished at 10,033.27.

It was also the Dow's best one-day point win since Sept. 24, when the blue chips rose 368 following the low of 8,235.81 they made Sept. 21 after the terror attacks.

Broader stock indicators also rose sharply. The Nasdaq composite index soared 83.74, or 4.3 percent, to 2,046.84. The tech-focused index hadn't ended above 2,000 since Aug. 7 when it closed at 2,027.29.

The Standard & Poor's 500 index gained 25.55, or 2.2 percent, to 1,170.35.

Advancers outnumbered decliners about 2 to 1 on the New York Stock Exchange, with 2,076 up, 1,093 down and 189 unchanged. Volume was 1.73 billion shares vs. 1.30 billion traded yesterday.

The NYSE composite index rose 10.16 to 591.32, the American Stock Exchange composite index gained 5.37 to 829.59 and the Russell 2000 index, which reflects the performance of smaller company stocks, advanced 11.58, or 2.5 percent, to 479.42.

Treasuries tumbled as unexpected growth in business at service companies pointed to an economic recovery that may prompt the Federal Reserve to stop cutting interest rates after a meeting next week.

The National Association of Purchasing Management said its nonmanufacturing business index increased to 51.3 last month after plunging to a record-low 40.6 in October. An index reading over 50 suggests expansion. Analysts had expected a reading of 43.

The decline in Treasuries erased gains from a four-day rally. The 2-year note fell 12 to 99 78; its yield rose 27 basis points to 3.07 percent. The 10-year note dropped 1 2732 to 100 2532; its yield gained 24 basis points to 4.90 percent. The 30-year bond plunged 2 532 to 100 1232; its yield rose 14 basis points to 5.35 percent.

Investors' enthusiasm for stocks mounted, analysts said, as they wanted to ensure they don't miss out on the market's next upturn.

"It's like, 'We have got to go in now,' " said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. "You are getting momentum going. And, momentum begets momentum."

Analysts attributed technology's strong run to buying by professional money managers looking to improve yearly performance. Historically, analysts said, the sector fares best in the fourth quarter.

"We are coming to the end of the year, and portfolio managers are reaching for performance. And tech stocks have done the best this quarter," Dickson said.

Technology has made the biggest strides since the Sept. 11 attacks. The Nasdaq has risen nearly 44 percent from its post-attack low of 1,423.19 on Sept. 21. The Dow has moved up almost 23 percent from its low; the S&P, up 21 percent.

But analysts were still cautious.

"The 10,000 number is a nice round number, but I don't think there is any magic to it," said Charles Blood Jr., senior financial markets analysts at Brown Brothers Harriman & Co.

Analysts also warned that the market might not be able to sustain its run. In the near term, they said, investors will feel compelled to take some profits, particularly when economic data disappoints them.

Positive forecasts from Cisco and Oracle made those companies the most heavily traded Nasdaq issues today.

Networking company Cisco rose $1.02 to $21.54 following encouraging news from Chief Executive John Chambers, who told analysts yesterday that November orders met expectations and that he feels the bulk of the business downturn is over.

Software maker Oracle soared 11.4 percent, up $1.57 at $15.37, on comments Tuesday by CEO Larry Ellison, who said there were signs of improvement for the company and that business had stabilized.

The Dow's high-tech components contributed to the rise. IBM advanced $4.76 to $121.40, Microsoft rose $2.10 to $68.10, and Intel gained $1.75 to $34.61.

Outside technology, AOL Time Warner climbed $1.08 to $35.83 after the world's largest media company announced CEO Jerry Levin is stepping down and will be replaced by co-chief operating officer Richard Parsons.