Star-Bulletin news services
Nasdaq catapults 40
to reach 2-year high
NEW YORK >> Wall Street began the first full week of 2004 with a solid advance yesterday, rising on encouraging interest rate news, a strong semiconductor sales report and an upbeat forecast from software firm Siebel Systems.
The Nasdaq composite index rose 2 percent to its highest point in two years and the Dow Jones industrial average picked up more than 130 points.
Positive high-tech news and a Federal Reserve governor's suggestion that interest rates might remain low sent stocks soaring as many traders got back to work after the holidays. But analysts noted that Wall Street was also following its tendency to rise during the first weeks of the year, and that the market's momentum has carried over from 2003.
"The big picture is still the bull market," said Alfred E. Goldman, chief market strategist with A.G. Edwards & Sons Inc. in St. Louis.
The Nasdaq closed up 40.68 at 2,047.36, after a gain of 1.7 percent last week. It was the Nasdaq's highest close since Jan. 8, 2002, when it closed at 2,055.74.
The Dow closed up 134.22, or 1.3 percent, at 10,544.07, after a 0.8 percent rise last week. The index of 30 actively traded industrials last closed higher on March 19, 2002, at 10,635.25.
The Standard & Poor's 500 index closed up 13.74, or 1.2 percent, at 1,122.22, following a weekly rise of 1.1 percent. It was the S&P's highest close since April 19, 2002, when it ended the day at 1,125.17.
Advancing issues outnumbered decliners almost 2 to 1 on the New York Stock Exchange. Volume was higher, with 1.57 billion shares, compared with 1.15 billion shares traded Friday.
The Russell 2000 index closed up 8.07, or 1.4 percent, at 568.92. The NYSE composite index gained 83.32, or 1.3 percent, to 6,534.58. The American Stock Exchange composite index rose 14.14, or 1.2 percent, to 1,189.71.
The Treasury's two-year note lost 1/32 to 99 2932, with its yield rising 2 basis points to 1.92 percent. The 10-year note slipped 1/32 to 98 3032, with its yield unchanged at 4.38 percent.
The sharp rise in the tech-dominated Nasdaq index reflected the growing sentiment that consumers and corporations alike are poised to upgrade their computer systems after several years of tight spending.
The Semiconductor Industry Association said sales rose 25.7 percent in November to $16.13 billion from $12.83 billion last year, led by rising sales of personal computers and growth in wireless markets. The group expects total sales for the year to exceed current forecasts.
Also today, the Commerce Department reported construction spending rose by 1.2 percent in November to a seasonally adjusted annual rate of $934.5 billion. It marked the fifth straight month the annual rate has set a record.
Investors and traders were further encouraged by remarks from Fed governor Ben Bernanke Sunday that there was room for the central bank to leave interest rates at rock-bottom levels for the near future.
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