Can Nasdaq Keep Streak Alive?
Notching its sixth-straight positive
close, the Nasdaq held on to Monday’s big gains by eking out a 0.4% gain Tuesday
that kept it above the psychological 2300 level. The Dow and S&P 500 were
unable to join the Nasdaq in the green, though, as they edged lower by 0.7% and
0.3%, respectively.
Volume was fairly robust again as it
roughly equaled Monday’s totals. Nasdaq volume came in at 2.3 billion shares
while NYSE volume was 1.25 billion shares.
Traders were impressed by the
resilience of the Nasdaq given its 4.8% gain on Monday, but some analysts
remained cautious, stating that the market probably isn’t yet completely out of
the woods.
“Anything
is possible but it’s hard to imagine that the biggest bubble of all-time is
going to be unwound in one year. Rate
cuts don’t cure bubbles or, for that matter, overcapacity and the wealth effect.
Companies don’t start buying equipment again just because the Fed is
reducing interest rates if what they have now is underutilized,” said Frank
Gretz, Market Analyst, Shields & Co.
“We
think we’re in a countertrend rally in the bear market, but we learned a long
time ago not to let our opinions get in the way of making money.
For now, stocks aren’t going down, they’re going up,” he added.Â
According
to preliminary numbers, the Nasdaq gained 8.14 to 2313.74, the Dow lost 80.68 to
11,257.24, and the S&P 500 eased 3.47 to 1309.36.
Top
sectors included banks
(
$BKX.X |
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PowerRating), up 1.9%, airlines
(
$XAL.X |
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1.7%, and Internets
(
$GIN.X |
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PowerRating), up 1.0%.
On
the downside were oil services
(
$OSX.X |
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products
(
$FPP.X |
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PowerRating), down 1.7%, and gold and silver
(
$XAU.X |
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PowerRating), down
4.4%.Â
Among
tech winners was Ciena
(
CIEN |
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PowerRating) which added 3.51 to 64.30. Ciena gapped up at
the open and traded as high as 66.73 before pulling back to finish near its lows
of the day. Volume was heavier than normal.Â
Cisco
(
CSCO |
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PowerRating) helped motivate the Nasdaq by rising .59 or 2.5% to 23.46 for its
highest close since early March. Volume again was heavier-than-average.
In
the telcos, WorldCom
(
WCOM |
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PowerRating) gained .91 or 5.1% to 18.46 on
heavier-than-average volume as it fought its way back above its 50-day moving
average.
America
Online
(
AOL |
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Chart |
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PowerRating) rose to new levels not seen since last October but ended the
day down .45 to 56.15. News that AOL would raise its monthly subscription fee
boosted the stock in early trade before it sold off toward the close. AOL traded
double its average volume.
Top
Dow stocks were American Express
(
AXP |
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PowerRating), up 2.4%, Microsoft
(
MSFT |
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PowerRating), up
2.2%, McDonald’s
(
MCD |
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PowerRating), up 2.1%, and Citigroup
(
C |
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PowerRating), up 1.9%.
The
weakest Dow stocks were AT&T
(
T |
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PowerRating) and Alcoa
(
AA |
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PowerRating), which were each off by
more than 3.5%.
Looking ahead,
economic news due out later this week includes April’s new home sales on Thursday at 10:00 AM ET and April’s existing home sales on Friday at 10:00 AM ET. Analysts expect figures of 980,000 and 5.28 million,
respectively.