Broad-Based Bounce
Stocks staged a broad-based rally Wednesday with all three major averages
moving solidly higher to finish near their highs of the day. The Dow and S&P
500 rose 1.0% each while the Nasdaq turned up the power in the final minutes of
trading to finish up 1.6%. With its gain, the Dow managed to close back above
its 200-day moving average for the first time in two weeks.
Volume spiked by about 30% above Tuesday’s level on the Nasdaq as 1.99
billion shares changed hands. NYSE volume also rose about 25% as 1.06 billion
shares traded.
Analysts commented that since the last several years were so positive for
stocks, the market had not experienced real tax-loss selling in some time. With
the Nasdaq down 50% from its peak, its evident that there are definitely some
big losses available to offset any sizeable portfolio gains, and that may
explain some of the recent weakness in tech.
“We saw another pre-announcement with Network Associates this morning,
and the stock is down roughly 70%. Notwithstanding that, I think people are
getting to feel that the Fed might move sooner rather than later as evidence
continues to show that the economy is slowing more than they would like to see.
So the next interest rate move no doubt will be rates coming down and not up,
and that’s a good sign,” said Adam Weisman, Managing Director, Wit
Soundview.
“We’re coming to the end of the tax selling season as the last day of
the year is the trade date where you can sell stocks and you have 30 days to
replace them. People for tax reasons are selling some of their worst positions.
I have seen a fair amount of that over the last week and a half,” he added.
According to preliminary numbers, the Dow rose 108.82 to 10,801.26, the
Nasdaq added 45.71 to 2539.23, and the S&P 500 gained 13.55 to 1328.74.
Top sectors were retailers
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up 4.0%, transports
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2.8%.
On the weak side were oil services
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One tech standout that lit up the sky was optical networker JDS Uniphase
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which jumped 5 7/16 or 13% to 47 5/16 on heavy volume.
Also strong was Qualcomm
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about 7 points above its 200-day moving average.
Dow winners were Disney
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Wal-Mart
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Despised by socially conscious funds and the various enemies of tobacco use,
consumer giant Philip Morris is having the last laugh on the tech wreck of 2000.
Philip Morris rose 11/16 to 45 1/4 as it hit a 52-week high and is by far one of
the top gainers 2000. In March it was in the high teens and has served as a safe
refuge for investing dollars to flow into ever since the tech tumble started in
early March.
Looking ahead, the December Consumer Confidence numbers and November’s
existing home sales will be released at 10:00 AM ET. Analysts expect a reading
of 129.5 for the confidence number and 5.04 existing home sales.