Market Watch

The Associated Press
Wednesday May 23, 2001

NEW YORK — Investors gravitated toward technology stocks again Tuesday, sending the Nasdaq composite index higher – albeit modestly – for a sixth straight session, its longest winning streak since February 2000. 

Blue chips faltered, however, on a mix of company-specific news, profit-taking and an expected pullback from the big advance that sent the Dow Jones industrials up 464.95, or 4.3 percent, over the previous four sessions. 

“I think the investment public is really falling back in love with technology and telecom and it’s been a long, long time since that’s been the case,” said Arthur Hogan, chief market analyst at Jefferies & Co. “It’s not surprising though. If this economy is going to turn around – and it’s showing signs that it is – the companies that are going to do the best, the fastest are going to be in the technology sector. It’s a market leader.” 

Gainers included Microsoft, up $1.52 at $70.31, and Cisco Systems, up 61 cents at $23.48. Some other high-profile tech stocks fell, including Oracle, down 55 cents at $17.55. 

Many stocks on Tuesday made moves based on individual companies’ announcements rather than investors’ overall worries about the economy or weak earnings reports, which have controlled trading activity in recent weeks. 

AOL Time Warner rose 64 cents to $57.24 on news its America Online unit was increasing the monthly price of its unlimited use plan by about 9 percent to $23.90. 

Analysts have been expecting investors, who still have concerns about when corporate profits will improve, to pull back and take profits from the market. 

After all, Wall Street has been rallying since early April, primarily in response to the five interest rate cuts by the Federal Reserve this year. Money that was has been on the sidelines for months while the economy struggled has been coming back into the market, and some retreat was inevitable as investors took profits and adjusted their portfolios. 

— The Associated Press 

This week, Wall Street has been concentrating on technology issues — a contrast with last week when blue chips were the focus. 

“People are buying the market because they believe the Fed has done enough to block the economic slowdown and restart and reaccelerate growth,” said Ronald J. Hill, investment strategist at Brown Brothers Harriman. “The next few months we may see some seesawing because there’s going to be plenty of negative news in second-quarter preannouncements. 

“But in the end, I think most people will be convinced that with all the Fed easing we’ve had and the possibility of another cut in the June, the worst is over.” 

The Russell 2000 index rose 1.32, or 0.3 percent, to 517.23. It has risen 30.59 points or 6.3 percent in the last six sessions. 

Declining issues led advancers 15 to 14 on the New York Stock Exchange. Consolidated volume came to 1.52 billion shares, compared with the 1.46 billion Monday. 

Overseas markets were mixed. Japan’s Nikkei stock average dropped 0.6 percent. But stocks traded higher in Europe where Germany’s DAX index rose 0.3 percent, Britain’s FT-SE 100 gained 0.6 percent, and France’s CAC-40 advanced 0.7 percent. 


On the Net: 

New York Stock Exchange: http://www.nyse.com 

Nasdaq Stock Market: http://www.nasdaq.com