CNET también está disponible en español.

Ir a español

Don't show this again

Tech Industry

Nasdaq surges, posts record weekly gain

The Nasdaq surges in heavy trading, as the tech-heavy index gains a record-setting 19 percent, or 608 points, for the week.

Stocks posted sharp gains today as investors remained optimistic that evidence of a slowing economy will persuade the Federal Reserve to hold off on further interest rate hikes.

The Nasdaq composite index jumped 230.78, or 6 percent, to 3,813.28, and the Standard & Poor's 500 index climbed 28.38, or about 2 percent, to 1,477.19.

With today's surge, the Nasdaq has jumped 11 percent in the past two days and 19 percent for the week, its best weekly performance ever. Previously, the best weekly gain was a 9.7 percent jump during the week of April 21.

About three stocks gained on the Nasdaq for every one that fell. Volume neared 2 billion shares, rebounding from the light trading that marked the past few weeks as investors saw little reason to jump into the market.

The Dow Jones industrial average rose 142.56 to 10,794.76 led by Hewlett-Packard, J.P. Morgan and Home Depot.

Many analysts attributed today's rally to a report showing that non-farm payrolls rose by a lower-than-expected 231,000 in May, compared with an expected gain of 383,000. The unemployment rate climbed to 4.1 percent from 3.9 percent in April.

In addition, another report showed that wage pressure is apparently easing as average hourly earnings rose just 0.1 percent. Economists expected a 0.3 percent rise.

The data was a dose of good news to investors because it indicates that the economy may be slowing down, which should keep inflation in check. And that could keep the Fed from further boosting interest rates.

"Everybody loves the figures today," said Tony Cecin, head of trading at U.S. Bancorp Piper Jaffray. "They're feeling really good as far as thinking that (Fed chairman Alan) Greenspan won't have to raise rates more than one pop."

Among the most widely held tech stocks, Intel rose $4.50 to $134.19; Microsoft climbed $1.75 to $66.31; Cisco Systems gained $3.44 to $64.38 and Oracle climbed $2.31 to $80.19.

In late trading, the CNET tech index rose 130.11 to 2812.62. Winners thrashed losers, as all but seven stocks in the index posted gains.

All of the 18 sectors tracked are up in the green. Internet service companies and Internet e-tailers were the largest gainers, climbing 13 percent each. Computer services companies posted the day's smallest gains, climbing 1 percent.

Among stocks in the CNET index, CMGI, Amazon.com and VeriSign posted strong gains.

CMGI rose $7.56, or about 15 percent, to $58.44. CMGI owns a stake in Web portal Lycos, which also gained $6.91 to $71.61. Lycos CEO Bob Davis said when his company merges with Terra Networks, the combined company's sales will pass Yahoo's by late 2001 or early 2002.

Amazon rose $7.69, or 15 percent, to $57.88 after receiving some favorable analyst comments.

VeriSign soared $27.78, or 18 percent, to $182.34. The company benefited from positive analyst comments and the fact that it will join the Nasdaq 100 index on June 9.

Inktomi and Yahoo also moved higher. Inktomi rose $12.88, or about 11 percent, to $134.19 and Yahoo rose $14.44, or 12 percent, to $134.50. The companies were recommended by Merrill Lynch analyst Henry Blodget as good Internet stocks to own.

The Philadelphia semiconductor index climbed 90.47, or 8.5 percent, to 1,157.75, led by chip equipment maker Lattice Semiconductor, which gained $5.25 to $67.94.

Despite today's optimism, not everyone is convinced the market is out of the woods. "The largest daily percentage rises occur during bear markets," said Michael Belkin, a former proprietary trading strategist at Salomon Brothers, who now runs his own financial and economic forecasting firm, Belkin Limited.

Belkin also said he wonders if investors have seen the last of inflation, a view that he says differs slightly from other observers. "It's an erroneous assumption to think that an economic slowdown means lower inflation," he said.

Belkin said that while retail sales and manufacturing purchases are down, indicators of a slowing economy, consumer confidence and energy costs are still evidence of inflation in other parts of the economy.

"Energy costs such as crude oil, natural gas and electricity are almost at their peak levels," he said. Higher costs in the energy sector can trickle down to other goods.

Byron Wien, chief U.S. strategist at Morgan Stanley, said the recent data is a good sign, but he also remains cautious. "I don't think even the optimists expected the numbers to be this good," he said. "They're so good, they're suspicious."

Wien said the numbers require further study. "It's very unusual for an economy that was that hot to slow down that quickly."