Nasdaq tiptoes above 2,000
Despite profit warnings and dour PC market forecasts, the index steps over the psychologically critical level for the first time this week.
The Nasdaq rose 38.58 points to 2,031.24, closing above the psychologically critical 2,000 mark, for the first time this week. The Dow Jones industrial average gained 50.66 points to 10,647.33.
The markets staged surprising gains despite early indications they would open sharply lower and a batch of bad news. Analysts cited bargain hunters as the reason for the rise.
"Not all the news out there is negative, or at least not as negative as people had feared," said Steve Fossel, portfolio manager for Berger Associates. "The market has been down for several sessions, and you have some investors hunting for bargains."
A report showing strength in the U.S. economy may have also contributed to the gains. The Conference Board reported that the U.S. index of leading economic indicators--a compendium of previously announced new orders, jobless claims, money supply, average workweek, building permits and stock prices--rose 0.5 percent in May, after growing 0.1 percent in April. That was the biggest gain since a matching 0.5 percent rise in December 1999. The report indicates that the U.S. economy may be poised for some recovery.
There wasn't much to inspire gains in the day's tech news headlines.
The PC sector was headed south after an analyst said back-to-school shopping, which usually helps fuel PC sales, may turn out to be flat this year. Salomon Smith Barney analyst Rich Gardner cut 2002 estimates for PC makers Compaq Computer, down 30 cents to $13.30; Gateway, up 6 cents to $15.37; and Dell Computer, off 22 cents to $23.45. He also lowered his price targets on Compaq and Gateway.
Meanwhile, Lehman Brothers analyst Dan Niles cut earnings estimates for Intel, up 82 cents to $27.49, and Advanced Micro Devices, off $1.04 to $23.95. CNET's Semiconductor Index was off 0.76 percent.
Infineon, a European chipmaker, was down $4.45 to $25.40 after it said it would have a loss of up to 600 million euros ($512.4 million) and warned it could not rule out a loss for its full fiscal year.
Things weren't looking good for the companies that make semiconductor equipment, either. Two chip equipment makers warned in the last 24 hours, and analysts are saying that the worst may be yet to come for the sector. Teradyne was down $3.15 to $35, and Asyst Technologies fell 53 cents to $15.95. CNET's Semiconductor Capital Equipment Index was down 1.93 percent.
AOL Time Warner CEO Gerald Levin said on Wednesday that advertising revenue was already stabilizing and the company remains on track to meet its 2001 financial targets. Shares rose $2.96 to $52.80.
Among other technology bellwethers, Microsoft gained $2.09 to $69.41, Oracle rose 76 cents to $17.52 and Cisco Systems fell 24 cents to $16.40.
Amazon.com was up $1.17 to $12.53, and Yahoo gained $2.93 to $18.49.
Staff and Reuters contributed to this roundup.