Nasdaq Posts Week-long Gains
N E W Y O R K, May 22, 2001 -- Technology stocks extended aweek-long rally as investors looked to exploit anexpected rebound in economic and corporate profit growth, afterthe Federal Reserve's five interest-rate cuts this year.
The Nasdaq Composite Index climbed 7.91 points, or0.34 percent, to 2,313.50, according to the latest data. TheDow Jones industrial average fell 80.68 points, or 0.71percent, to 11,257.24. The benchmark Standard & Poor's 500index fell 3.50 points, or 0.27 percent, to 1,309.33.
"The thinking is — rightly or wrongly — that the Nasdaqhas more upside, that you will get the best bang for your buckout of the Nasdaq because it has been beaten down so much andwe are in recovery mode," said Peter Coolidge, a senior equitytrader at Brean Murray & Co.
Among individual issues, AOL Time Warner Inc. fell45 cents to $56.15, ranking as the most active stock on the NewYork Stock Exchange.
The No. 1 Internet services provider saidit would raise the monthly price of its flagship service'sunlimited use plan by $1.95, a move that analysts said might benecessary for it to meet its growth targets. The stock is upabout 74 percent since the start of the year.
On the Nasdaq,Cisco Systems , the No. 1 maker of gear that powers theInternet, was the most active issue, rising 61 cents to$23.48.
Financial giants offset losses in the Dow as investors betlower borrowing costs would boost consumer spending. AmericanExpress Co. jumped $1.06 to $46.05. JP Morgan Chase &Co. rose 59 cents to $50.02.
Monday’s Trading Highlights
Technology stocks surged Monday, driving the Nasdaq toits fifth straight winning session and its highest level sincelate February, as investors bet the Fed's volley of rate cutswill pump up earnings in the high-tech sector.
Investors shifted out of safe havens and funneled moneyinto the volatile tech sector, traditionally a high-growtharea, on hopes the Fed's aggressive monetary easing will stokean economic recovery. The market kicked off its rally last weekafter the central bank slashed interest rates for the fifthtime this year by a half a percentage point.
"The fact is yesterday's gains came on no news, and whenyou move on internals only it sends a powerful message …Investors are tending to ignore the present and look to thefuture," Prudential's Wachtel said.
"Second-quarter earnings will be poor and the economic datacontinues to show the economy just about moving along … butthe passage of time will allow the economy to revive."
Wall Street got second-tier weekly economic reports aheadof the open but these were not seen impacting trade much.
Retail chain store sales rose for a second week as discountstores met their sales targets, but department stores sufferedfrom a decline in customer turnout, the Bank ofTokyo-Mitsubishi and UBS Warburg said in a report compiled fromseven major U.S. discount, department and chain stores.
The Associated Press and Reuters contributed to this report.