Star-Bulletin news services
Nasdaq kisses 2,000,
then ends day off 20
NEW YORK >> The Nasdaq composite index flirted with 2,000 for the first time in nearly two years yesterday and the Dow Jones industrials approached the 10,000 level as investors eagerly picked up stocks following a strong productivity report but then grew cautious.
The tech dominated Nasdaq reached 2,000 and the Dow came within 58 points of 10,000 in the early afternoon before both indexes retreated and closed mixed. Analysts said investors were optimistic but choosing to take their time in sending stocks significantly higher.
"Folks are really starting to believe in the sustainability of the economic recovery," said Richard J. Nash, chief market strategist at Victory Capital Management. "The productivity numbers were just spectacular" and should bring "another good surge in corporate profits."
"The economic data is so encouraging, folks still want to get involved in the market."
The Nasdaq rose as high as 2,000.92 before falling back to close at 1,960.25, down 19.82, or 1 percent. The index, which suffered the worst losses during the bear market, had not traded above 2,000 since Jan. 15, 2002.
The Dow, meanwhile, closed up 19.78, or 0.2 percent, at 9,873.42. Earlier in the day, the blue-chip average rose as much as 88 points to reach 9,942.01. The last time the Dow traded above 10,000 was May 31, 2002.
The Standard & Poor's 500 index fell 1.89, or 0.2 percent, to 1,064.73.
Declining issues outnumbered advancers 5 to 4 on the New York Stock Exchange. Consolidated volume was moderate at 1.85 billion shares, the same amount traded Tuesday.
The Russell 2000 index fell 8.41, or 1.5 percent, to 545.19. The NYSE composite index rose 3.16, or 0.1 percent, to 6,142.78. The American Stock Exchange composite index was unchanged at 1,117.17.
The Treasury's two-year note slipped 1/32 to 99 1932, with its yield rising 2 basis points to 99 1932. The 10-year note fell 632 to 98 2532, with its yield rising 2 basis points to 4.40 percent.
The Nasdaq's return to 2,000 was a significant step in the stock market's recovery from the heavy losses that followed the dot-com bust, recession and corporate ethics scandals of recent years. But the index still remains well below its record close of 5,048.62, reached March 10, 2000.
Yesterday's gains followed a Labor Department report that U.S. productivity shot up at a 9.4 percent annual rate in the third quarter. It was the best reading in 20 years and better than economists' forecasts as well as the 8.1 percent rate initially estimated by the department a month ago.
Oracle Corp. rose 50 cents to $12.90, and PeopleSoft Inc. gained 41 cents to $21.49, after UBS raised both of the company's stock ratings to "neutral" from "buy."
Merck & Co. advanced $1.50 to $43.63 after the pharmaceutical company said it expected 2004 earnings to increase about 7 percent from this year.
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