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Stocks Close Higher as Nasdaq Extends Winning Streak

Wall Street: Analysts attribute resilience to optimism that Fed will lower interest rates again.

April 13, 2001|From Associated Press

Investors gave a positive spin to disquieting economic news Thursday, bidding technology and blue-chip stocks solidly higher amid hopes for another interest rate cut. The advance gave the Nasdaq composite index a four-day winning streak and its best week in 10 months.

The market recovered from moderate losses earlier in the session, and analysts attributed its resilience to optimism that the Federal Reserve will lower interest rates for a fourth time this year when it meets May 15.

"There are no inflationary pressures like a year ago," said Gary Thayer, chief economist at A.G. Edwards & Sons. "They do think it leaves the door open for a rate cut."

The Nasdaq rose 62.48 points, or 3.3%, to 1,961.43, the first time since early September that the index has had a four-day winning streak. With the markets closed today for Good Friday, the gain meant the Nasdaq ended the week up 241.07 points, or 14.0%, its best weekly percentage gain since it rose 18.9% in the week ended June 2. That week had five days, compared with the four in this holiday-shortened week.

The Dow industrial average closed up 113.47 points, or 1.1%, at 10,126.94. For the week, the Dow gained 335.85 points, or 3.4%. The broader Standard & Poor's 500 rose 17.61 points, or 1.5%, to 1,183.50, ending the week with a 55.07-point, or 4.9%, gain.

As the day started, traders looking for good news were disappointed as the nation's biggest retailers generally reported weak results for March due to unusually cold weather and the slumping economy.

Sears, Roebuck & Co. said its lackluster sales would cause it to miss first-quarter earnings projections. And Wal-Mart Stores Inc., the nation's largest retailer, said its results came in at the low end of expectations and that it also might miss first-quarter estimates.

Sears managed to move up 10 cents to $34.75, but Wal-Mart dropped 53 cents to $49.70 and Federated Department Stores Inc. fell 24 cents to $41.41.

The Commerce Department also issued retail sales figures for March that were weaker than expected. And the Labor Department reported that the number of Americans filing new claims for state unemployment insurance last week climbed to its highest level in five years, further evidence of the weakening labor market.

On the bright side, the Labor Department's report of a 0.1% drop in wholesale prices last month raised investors' hopes for a further reduction in interest rates. The decline indicated that inflation, another of the Fed's concerns, remains under control.

"Ironically, today's economic reports were all weaker than had been forecast and indeed showed outright declines, suggesting the economy is weak and that the Fed may well ease rates further to try to support the economy," said Carol Stone, deputy chief economist at Nomura Securities International Inc.

Technology stocks, which helped power the Nasdaq's advance, were mostly higher, shaking off earlier earnings concerns.

Juniper Networks Inc., a maker of high-speed Internet routing gear, jumped $7.62 to $50.38 after meeting analysts' first-quarter earnings expectations but issuing a second-quarter outlook below analyst forecasts.

Yahoo Inc. was up $1.10 at $16.96. On Wednesday, the Internet portal beat Wall Street's sharply reduced first-quarter earnings forecasts but also said it is cutting its work force by 12%.

Broadcom Corp. was up $3.59 to $35.38, and Vitesse Semiconductor Corp. rose 17 cents to $25.70 as investors looked past J.P. Morgan's downgrade of both stocks.

Non-technology stocks also advanced. Citigroup Inc. rose 96 cents to $47.30, and General Electric Co. gained $1.43 to $44.70 after announcing first-quarter results that matched Wall Street's expectations.

Advancing issues outnumbered decliners 3 to 2 on both the New York Stock Exchange and the Nasdaq Stock Market. Volume was light as many traders took the day off for a long weekend.

The Russell 2000 index, which measures the performance of smaller companies' stocks, rose 5.77 points, or 1.28%, to 455.02. For the week, the Russell rose 20.36, or 4.7%.


Market Roundup, C6, C7

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