Constructive Conviction
Strong earnings from some of the beleaguered big-cap techs helped trigger a
massive Nasdaq rally Thursday on heavy volume that lifted the Nasdaq 7.8% by the
close. From Wednesday’s intraday low of 3026.11, the Nasdaq has snapped back nearly
13%.
Thursday’s rally was broad-based, with solid gains also booked by financials,
transports, and telecom. For the day, the S&P 500 rose 3.5% while the Dow
gained 1.7%.
Nasdaq volume eased 8% from Wednesday’s level, with a still impressive 2.32
billion shares changing hands. NYSE volume also eased by 8%, as 1.30 billion
shares traded.
“I think that we saw follow-through from yesterday’s bounce and some
confidence coming back into the market. Maybe we have seen a blow-off on the
downside yesterday,” said Rob Cohen, Head of Listed Stock Trading, Credit
Suisse First Boston.
“Some of the earnings that came out last night were much more
constructive certainly in technology, and we’re starting to see some conviction
in the short term from our institutional customers that we’ve reached a level
where they’re a lot more comfortable being buyers,” he added.
According to preliminary numbers, the Nasdaq soared 247.04 to 3418.60, the
Dow gained 167.96, and the S&P 500 added 46.63 to 1388.76.
Top sectors included semiconductors
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up 10%, and Internets
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On the weak side were health care
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Leading the old guard tech rally was Microsoft
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1/8 or 20% to 61 7/8 on heavy volume of 127 million shares. Microsoft posted
earnings of 46 cents per share, beating First Call/Thomson Financial estimates
of 41 cents per share.
Additional old-tech winners were WorldCom
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up 10%, Oracle
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Newer techs surging on big volume and finishing near their highs of the day
included Avanex
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up 24 1/2 to 157 1/2, Broadcom
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Sierra
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Looking ahead, economic news remains light for the next few days, but
existing home sales for September is scheduled for next Wednesday at 10:00 AM.
Street estimates look for a figure of 5.10 million units.