Nasdaq posts more gains

The Nasdaq records another 30-point-plus gain, fueled by the technology stocks that dominate the index.

CNET News staff
2 min read
The Nasdaq ($COMPQ) today recorded another 30-point-plus gain, fueled by the technology stocks that dominate the index.

The Nasdaq closed at 1339.24, up 33.91 points. And during trading, the market rose at one point to a day's high of 1339.86.

The movement follows similar activity on Friday, when the market saw its largest single-day point gain ever. The Nasdaq closed at 1305.37, up 34.87 points, on Friday.

Technology stocks led the way, holding nine of the top ten spots in volume trading this morning.

Oracle (ORCL) rose 5.3 percent; Ascend (ADND) was up 6 percent; Cascade (CSCC) was up 6.6 percent; and Informix (IFMX) was up 8.3 percent. Microsoft (MSFT), also one of the top volume stocks, was the exception; it lost 2-3/8.

The surge is beign driven by a combination of panic buying, forecasts that PC shipments are about to accelerate, and strong economic reports released last week.

Nasdaq performance this year has fallen from a high of around 1440 in mid-January to a low of around 1120 in mid-April until a rally began that has lasted for nearly a month. The rally is partly based on analysts' expectations that the market will pick up in the spring, as it usually does, but is also being carried along by its own momentum.

"Some of this is just panic buying," said one analyst. "It's classic momentum. A stock in motion tends to continue in that motion, and then basically more momentum develops."

Shares for PC vendors are also being fueled by recent reports that unit shipments could be above expectations this year.

"Year-over-year growth patterns look strong. Compaq Computer (CPQ) is being aggressive on pricing, new Intel chips are coming out, and the economy is just really good. That is the recipe for a decent tech market," said Mark Specker with Stamford, Connecticut-based Soundview Financial.

Wall Street simply has convinced itself that higher stock prices are on the way for the later part of this year, Specker said, and "investors don't want to be sitting on the sidelines" when stocks go up.

Last week positive reports of the overall economy's good health also fueled the gains. On Friday, reports showed the lowest unemployment rates since the Nixon administration. Wall Street also expects that the balanced budget agreement will force long-term interest rates to stabilize or go down.