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Nasdaq breaks 2,000;
Dow rises 125 points
NEW YORK >> The Nasdaq composite index burst past 2,000 yesterday, and the Dow Jones industrials surged more than 120 points as investors shook off concerns about the impact of mad cow disease and looked optimistically toward 2004.
The market also got a lift from early indications that the holiday shopping season had gone well, including a report from MasterCard that consumer spending was up 6.5 percent. Portfolio managers may be looking for more positive news in January, which is typically a good month for the markets, said Brian Bush, director of equity research at Stephens Inc.
"Even with a heightened terror alert, the onset of mad cow for the first time in the U.S., throughout all of that, the market has continued to move higher," Bush said. "If you're a portfolio manager, you've had a great year, the first up year in three, and the outlook for '04 looks good ... you're probably looking to make some bets going into the new year."
The Nasdaq closed up 33.34, or 1.7 percent, at 2,006.48, its highest point in nearly two years, following a 1.1 percent advance last week. The tech-dominated index climbed above 2,000 for all of a minute on Dec. 3 before falling back, and had not closed above 2,000 since Jan. 15, 2002, when it stood at 2,000.91.
The Dow rose 125.33, or 1.2 percent, to 10,450.00, after gaining 0.5 percent last week. It was the highest close for the index since March 21, 2002, when it ended the day at 10,479.84. The Dow closed above 10,000 for the first time in 18 months on Dec. 11. And the Standard & Poor's 500 index gained 13.59, or 1.2 percent, at 1,109.48, after rising 0.2 percent last week. It was the first time the S&P closed above 1,100 in more than 20 months; it last closed higher on April 19, 2002, at 1,125.17. Advancing issues beat decliners 3 to 1 on the NYSE. Volume was light, with 1.39 billion shares traded, compared with 464 million shares on Friday, when the market closed early following the Christmas holiday.
The Russell 2000 index, which tracks the performance of smaller companies, closed up 8.98, or 1.6 percent, at 563.88. The NYSE composite index rose 77.86, or 1.2 percent, to 6,442.20. The American Stock Exchange composite index rose 5.19, or 0.5 percent, to 1,171.14. The Treasury's two-year note fell 2/32 to 100 1/32, with its yield gaining 4 basis points to 1.85 percent. The 10-year note dropped 2332 to 100 2/32, with its yield gaining 9 basis points to 4.24 percent.
The Nasdaq's recovery has been perhaps the most important indicator of the stock market's growing strength. Decimated in the three-year bear market, the Nasdaq has regained 80.1 percent since it hit a six-year low of 1,114.11 on Oct. 9, 2002.
While it still has more than 3,000 points to regain before it can reach its all-time closing high of 5,048.62, no one really thinks the Nasdaq should return to that level anytime soon.
Trading was light as many investors took off the last week of the year. But institutional investors were engaged in end-of-the-quarter window dressing, the practice of adding to portfolios to make them look more impressive in reports to shareholders.
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