Blue Chips Battle Back
Blue chips staged a broad-based rally Monday that helped the Dow tack on a
nearly 2% gain that further bounced it back from Thursday’s harrowing plunge.
From its intraday Thursday low, the Dow has gained back more than 580 points to
put it within striking distance of the psychological 10,000 level.
While the Nasdaq failed to join the Dow to the upside, it did manage to keep
its loss to just 0.5% and hold above the 1900 level. The S&P 500 joined the
blue chip chorus with a 1.1% gain.
Volume was solid for a Monday, as 1.11 billion shares traded on the NYSE and
1.70 billion shares changed hands on the Nasdaq.
In economic news, February housing numbers came in slightly better than
expected, signaling that perhaps the economy remains more intact than many
analysts had feared. Existing home sales came in at 5.18 million, which was
higher than the anticipated 5.04 million units. New home sales came in at
911,000, which was just about even with expectations.
“We are entering the peak of the first quarter earnings pre-announcement
season and it is ugly. The negative
earnings pre-announcements are in technology while the energy, finance, and
health sectors are positive,” said Paul
Rabbitt, President, RabbittAnalytics.
Since
it is unlikely the Fed cuts rates in the next 2-3 weeks, the focus will shift
entirely to earnings. While
pessimistic sentiment is highest in two years, it remains below extremes that have
proved significant bottoms in the past,” he added.
According to preliminary numbers, the Dow gained 182.75 to 9687.53, the
Nasdaq slipped 10.02 to 1918.66, and the S&P 500 added 12.89 to 1152.72.
Top sectors were Japanese stocks
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up 4.1%, biotechnology
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up 2.7%.
On the downside were computer technology
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semiconductors
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Tech winners included Verisign
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NVIDIA
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California utilities PG&E
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each soared 29% on news of a rate hike plan to shore up the state’s electricity
problem.
Dow winners were United Technologies
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5.6%, International Paper
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biggest Dow loser was Johnson & Johnson
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Looking ahead, the consumer confidence report for March is due out Tuesday at
10:00 AM ET, and analysts expect a reading of 105. Also, Alan Greenspan will be
addressing a group of economists, so traders will undoubtedly be listening for
any inter-meeting rate cut clues.