Dow Jones rises more than 190 points during bargain-hunting binge
NEW YORK (AP) – Fervent bargain hunters snatched up stocks discounted by two weeks of declines on Monday, sending the Dow Jones industrials soaring more than 190 points. “What we have is a rebound from Friday. The market is in a really oversold condition,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc.
The Dow closed up 193.69, or 2.3 percent, at 8,627.40, more than wiping out Friday’s loss of 104.69. The Dow ended last week down 2.5 percent, its second straight weekly decline.
The broader market was also higher, bouncing off two consecutive losing weeks. The Nasdaq composite index rose 37.91, or 2.8 percent, to 1,400.33, having lost 4.2 percent last week. The Standard & Poor’s 500 index advanced 20.92, or 2.4 percent, to 910.40, following last week’s loss of 2.5 percent.
Investors sold shares in the previous two weeks to take profits from two months of rallies on Wall Street, which were based on hopes that earnings and the economy will rebound in 2003. Analysts said that occasional profit taking is to be expected but that optimism has overshadowed pessimism in the market.
“Earnings are improving and consumer spending is hanging in there,” said David Sowerby, chief market analyst at Loomis, Sayles & Co. “And capital spending is slowly beginning to accelerate, and (there is the feeling) that we will have a positive environment for the economy and corporate earnings and that stocks will respond favorably.”
Brokerage house upgrades gave the market some of its lift Monday.
CSX rose $1.32 to $29.15 after Morgan Stanley raised its rating on the stock. Delta Air Lines advanced 59 cents to $12.75 following an upgrade from Credit Suisse First Boston.
J.C. Penney rose $1.15 to $24.75 after saying its December same-store sales – those at stores open at least one year – were ahead of its projections.
Wal-Mart climbed $1.40 to $51.94 despite saying that it sees December same-store sales at the low end of its forecast calling for growth of 3 percent to 5 percent.
The technology sector enjoyed the biggest gains, in keeping with how it has fared throughout the market’s fourth quarter rallies.
Analysts say investors newfound preference for tech is a sign of how bullish they are feeling going into 2003.
Monday’s tech gainers included Dell Computer, up 88 cents at $27.51, and Broadcom, up 88 cents at $17.11.
Advancing issues outnumbered decliners more than 5 to 2 on the New York Stock Exchange. Consolidated volume was light at 1.64 billion shares, below Friday’s already light 1.68 billion.
The Russell 2000 index, the barometer of smaller company stocks, rose 6.92, or 1.8 percent, to 394.90.
Overseas, Japan’s Nikkei stock average finished Monday down 0.8 percent. In Europe, France’s CAC-40 rose 3.2 percent, Britain’s FTSE 100 gained 2.7 percent and Germany’s DAX index surged 4.2 percent.
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