Nasdaq Crosses 4000 To Sixtieth Record Close of 1999
On the heels of Tuesday’s strong consumer confidence numbers and the better-than-expected 6% rise in existing home sales, stocks received more news Wednesday of a booming economy. The November Index of Leading Economic Indicators rose 0.3% which was better than the 0.2% analysts expected. Stocks zoomed to new record highs on the news, ignoring the possibility that the booming economy might soon lead to interest rate hikes.
Technologys, Internets and broker/dealers set the pace as stocks moved higher in what continues to be an extraordinary year for the market. All three major indexes closed at all-time highs, and the Nasdaq managed to close above 4000 for the first time.
According to preliminary numbers the Dow gained 7.95 to 11484.66, the Nasdaq soared 68.92 to 4041.03, and the S&P 500 added 5.74 to 1463.40.
Wednesday’s top-performing groups included broker dealers [$XBD.X>$XBD.X], up 5.7%, Internets [$GIN.X>$GIN.X], up 3.0%, pacific high-tech [$PSE.X>$PSE.X], up 3.5%, and biotechs [$BTK.X>$BTK.X], up 2.3%.
Groups under pressure Wednesday included telecom [$XTC.X>$XTC.X], down 1.5%, drugs [$DRG.X>$DRG.X], down 1.0%, retailers [$RLX.X>$RLX.X], down 1.2%, and health care [$HCX.X>$HCX.X], down 1.2%.
Qualcomm [QCOM>QCOM] was Wednesday’s big winner, rising 153 to 656 after Paine Webber initiated coverage of the company and set a $1000 price target. Paine Webber justified its $1000 price target by explaining that the wireless technology patents that Qualcomm will license to wireless device companies worldwide will possibly allow Qualcomm to maintain earnings growth rates of 75% per year over the next decade.
Also helping the Nasdaq close at its sixtieth record high of 1999 were Yahoo [YHOO>YHOO], up 13 3/8 to 403 5/8, JDS Uniphase [JDSU>JDSU], up 14 7/8 to 334 3/8, CMGI [CMGI>CMGI], up 7 ¾ to 275 3/4, Sun Microsystems [SUNW>SUNW], up 2 1/16 to 78, and Oracle [ORCL>ORCL] , up 3 7/8 to 110.
Broker dealers rocketed after Charles Schwab [SCH>SCH] announced it would likely beat fourth-quarter earnings estimates. For the day, Schwab gained 5 7/16 to 39 3/4, and E*Trade [EGRP>EGRP] added 2 3/4 to 28 1/2. Also strong were AG Edwards [AGE>AGE], Bear Stearns [BSC>BSC], and Paine Webber [PWJ>PWJ] with each posting gains of more than 4%.
Top Internet performers included New York based Internet advertiser DoubleClick [DCLK>DCLK]. Donaldson Lufkin Jenrette raised its price target for the stock to 300, and that helped shares move up 28 3/16 to 249 1/8.
Traders now look toward Thursday’s release of the Chicago Purchasing Managers Index which should offer insight into whether inflationary pressures might be building in the economy.