Technology stocks climbed, driving the Nasdaq up to its highest close in a month, as solid corporate results lured investors back into high-tech powerhouses and tame US inflation data fostered hopes of more interest-rate cuts.
After the close of regular trading, IBM, the world's No. 1 computer maker, posted results that beat Wall Street's expectations while Apple Computers reported its first loss in three years, but those results beat previously lowered expectations.
IBM shares jumped to $104 on the Instinet electronic brokerage system from their regular close of $96-11/16, up $3-15/16 on the day, on the New York Stock Exchange. Apple's stock also surged to $17-3/4 from its Nasdaq close of $16-13/16. During regular trading, Apple had slipped 5/16.
During Wednesday's regular session, blue chips fell as investors swiveled out of old-economy stalwarts, including drug stocks, and into higher-growth tech shares on hopes the economy will rebound if the U.S. Federal Reserve ratchets down interest rates some more in 2001.
"The Nasdaq is doing extremely well with some good earnings reports out after the closing bell last night," said Mr Peter Coolidge, managing director of equity trading at Brean Murray & Co. "We did not get the unexpected and the tech market breathed a sigh of relief from that."
The Nasdaq Composite Index rose 64.23 points, or 2.45 per cent, to 2,682.78. Computer networking company Juniper Networks helped boost the tech-packed measure, leaping $8-3/16 to $136-3/16 after beating earnings estimates and raising its full-year forecast late Tuesday.
The Dow Jones industrial average lost 68.32 points, or 0.64 per cent, to close at 10,584.34. Minnesota Manufacturing & Mining Co., better known as 3M, lost $3-1/2 to $110 and pressured the blue-chip gauge after blaming the slowdown in U.S. economic growth and the strong dollar for the shortfall in its quarterly results.
But the Dow got a lift from two of its biggest tech components, IBM and Hewlett-Packard Co. Computer and printer maker H-P gained $1-1/4 to $31-5/8.
The Nasdaq has risen 11 percent so far in 2001, after a harrowing drop of nearly 40 percent last year. The Dow has dipped 1.2 percent so far this year, compared with a 6.2 percent drop in 1999.
Reuters