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Rising Nasdaq Closes In on 5,000 Amid Record Volume

March 02, 2000|From Times Staff and Wire Reports

"Nasdaq 5,000!" is the new market rallying cry.

The Nasdaq composite index continued its astounding climb, surging 87.39 points, or 1.9%, to a record 4,784.08 on Wednesday.

Nasdaq trading volume also set a record--at 2.14 billion shares--eclipsing the previous record of 2.09 billion, set on Tuesday.

Stocks in general were higher, ignoring yet another jump in crude oil prices. While the Dow Jones industrials inched up just 9.62 points to 10,137.93, the blue-chip Standard & Poor's 500 index rose 0.9%.

Winners edged losers by 16 to 15 on the New York Stock Exchange, where trading also was very heavy.

But Nasdaq remains the focus for many investors. And the river of cash flowing into Nasdaq technology stocks shows no sign of ebbing, analysts said.

On Wednesday, money poured into one of Nasdaq's biggest names--Apple Computer--sending the shares up $15.69 to a record $130.31 on optimism over the company's new products.

Biotechnology stocks also staged another major rally. Affymetrix surged $12.63 to $302.25, Genome Therapeutics gained $7 to $56.50 and Chiron--one of the few profitable biotech firms--jumped $15 to $65.

In the telecom sector, fiber-optics star JDS Uniphase zoomed $17.25 to a record $280.88. The stock was as low as $21.38 last year.

Some veteran telecom names also gained: Lucent Technologies jumped $8.94 to $68.44 after announcing plans for a spinoff.

The Dow index would have finished much weaker without SBC Communications' surge.

The largest local phone company shot up $4.25 to $42 on reports it will combine its wireless phone operations with those of BellSouth. Shares of BellSouth rose $2.44 to $43.

The frenzy for technology and telecom stocks has grown in recent weeks as investors have come to believe that fast-growing tech companies, which tend to be investor-financed and borrow less than more established firms, are in the best position to withstand the effects of rising interest rates.

Indeed, with each warning from Federal Reserve Chairman Alan Greenspan that the central bank is likely to continue raising rates to slow the economy, tech stocks only seem to get stronger.

"His hawkish interest rate comments have folks running from stocks that borrow a lot of money and are heavily affected by overall economic activity," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons.

That has translated into a wholesale dumping of many Dow stocks. Sellers then are turning and reinvesting that money in Nasdaq names--even as those stocks reach stratospheric levels relative to underlying sales and earnings.

The irrepressible Nasdaq index may be just days from breaking 5,000, said Scott Bleier, an investment strategist at Prime Charter.

The index must rise 4.6% from Wednesday's close to reach 5,000. It is already up 17.6% so far this year.

While bigger tech stocks fueled Nasdaq's gains last year, this year smaller- and mid-sized tech issues are powering Nasdaq as well. The Russell 2,000 small-stock index gained 1.8% to a record Wednesday.

In other trading, bond yields were flat or slightly lower despite the latest oil price surge.

Among Wednesday's highlights:

* Tech winners included Intel, up $2.88 to $115.88; Micron Technology, up $5.75 to $101.75; Seagate, up $3.13 to $50.94; and Emulex, up $15.56 to $175.56.

* In the telecom arena, Scientific Atlanta soared $11.31 to $114 and Pegasus Communications gained $12 to $136.

* DoubleClick slid $8.25 to $80.56 on reports the Internet advertising company's partners AltaVista and distanced themselves from the company because of concern DoubleClick released information about its customers. Other Internet names were mixed. EBay gained $5.88 to $149.25 but America Online lost $1.94 to $57.

* Energy shares gained with higher crude prices. Tosco rose $1.63 to $28.38 and Baker Hughes jumped $1.44 to $27.31.

* Coca-Cola rebounded $2.38 to $51 after analysts said they expect sales and profit growth to rise to the highest levels in more than three years.

* Bristol-Myers sank $6 to $51.25, leading other drug stocks lower. The company said it lost a round in court that could expose it to U.S. generic competition this year for the $1.5-billion-a-year cancer drug Taxol.

But HMO shares jumped after WellPoint bid for Aetna.


Market Roundup, C9

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