NEW YORK — The possibility of future interest rate cuts sent tech stocks surging Monday, lifting the Nasdaq composite index back above 3,000.
Blue chips struggled to keep up in light trading as Wall Street awaited a U.S. Supreme Court ruling that could potentially end the month-old presidential deadlock.
“It’s been a real up and down kind of day, subject to the whims of what people hear on TV” about the election, said Scott Bleier, chief investment strategist for Prime Charter Ltd.
But, he said, “the fact is that the market’s entire tone has improved dramatically since the Fed ... basically told everybody that the slowdown we’re seeing is not going to be allowed to dive into a recession.”
The Nasdaq closed up 97.67 at 3,015.10. The last time the index traded at or closed above 3,000 was Nov. 17; it has also risen more than 20 percent since dipping below 2,500 on Nov. 30.
The Standard & Poor’s 500 index rose 10.31 to 1,380.20.
After weeks of shunning the tech sector as too risky, investors have resumed buying the stocks, many of which are now trading at less than half their 52-week highs.
The gains didn’t extend to consumer staples, utility and other so-called defensive stocks, which moved higher in recent months as investors looked for relatively safer places to put their money.
“Most people really have their eye on the Nasdaq today,” said Bleier, the Prime Charter strategist. “You are seeing profit-taking in stocks like Procter & Gamble, retailers and oil stocks.”
— The Associated Press
Earnings, while still on investors’ minds, weren’t having a big impact on the overall market.
Clothing retailer Lands’ End rose $2.14 to $26.95 despite warning that its earnings for the full year will be flat. A similar prediction sent home improvement chain Lowe’s down in early trading, but the stock recovered, rising $1.94 to $41.81.
Drug maker Pfizer rose 13 cents to $43.63 after the company told analysts it is comfortable with its earning projections for 2001.
Financial issues were also strong, a reflection of optimism that lower interest rates will encourage companies to borrow and expand. Banker J.P. Morgan rose $9.50 to $156.75; American Express climbed $1.69 to $56.50.
The advance was the second straight gain for Wall Street, which began rallying last week after Federal Reserve Chairman Alan Greenspan indicated he was concerned about softening economic conditions.
The upturn has been curbed somewhat by concerns the nation’s slowing economic growth would hurt earnings in the coming months. The unresolved presidential election also has contributed to Wall Street’s lack of conviction, but not enough, analysts say, to derail the optimism about interest rates.
They point to Intel’s continued advance, despite a warning of a revenue shortfall last week, as proof the Nadaq has seen its darkest days — at least for the short term.
“What we’re doing is following upon a rally we started last week, which was based on the idea that the Fed ... may eventually cut interest rates,” said Richard Dickson, a technical analyst at Scott & Stringfellow Inc. “You’re starting to see a rotation back into tech stocks and some profit-taking in consumer staples companies. The question is, how long does that last?”
Advancing issues outnumbered decliners 13 to 11 on the New York Stock Exchange, where volume came to 1.48 billion shares, compared with 1.65 billion at the same point Friday.
The Russell 2000 index was up 8.16 at 487.23.
Overseas, Japan’s Nikkei stock average rose 2.2 percent. Germany’s DAX index was up 1.4 percent, Britain’s FT-SE 100 advanced 1.3 percent, and France’s CAC-40 gained 2.3 percent.
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