NEW YORK (AP) Wall Street extended its advance yesterday with a moderate rally that boosted technology stocks but ultimately failed to take the Dow Jones industrials above 10,000.
Analysts attributed investors’ tentativeness to their worries that the stock market might be rising too much, too quickly. The Dow has been flirting with the 10,000 level and bull market territory during the past several sessions. A report from the National Bureau of Economic Research confirming that the United States is in a recession added to the debate.
“There’s a tug of war between the bears and the bulls here,” said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray.
“I think the market is in pretty good shape. The problem, I think, though, is that many investors are having a hard time diagnosing when earnings will start to turn positive. And we don’t see positive earnings, positive growth until the latter half of 2002,” Mr. Belski said.
The Dow closed up 23.04, or 0.2 percent, at 9,982.75, rebounding from a deficit of 55 points earlier in the session. Although the Dow crossed the 10,000 mark twice last week, it has not closed above that level since Sept. 5, six days before the terrorist attacks.
Broader stock indicators also advanced. The technology-laden Nasdaq Composite Index was up 38.03, or 2.0 percent, at 1,941.23, while the Standard & Poor’s 500 index rose 7.08, or 0.6 percent, to 1,157.42.
The Dow is now more than 21 percent above the 2001 low set Sept. 21 after the terror attacks. A bull market technically is defined as a 20 percent or greater recovery from a low.
“The Dow passing back over 10,000 will generate a headline or two and that should stir some enthusiasm among individual investors. Whether it’s sustainable or not will depend more on underlying fundamentals: Is this economy bottoming out and about to recover? Are profits about to bottom out and recover?” said Charles G. Crane, strategist for Victory SBSF Capital Management. “We won’t know those answers for sure for a while.”
Indeed, analysts warn against confusing a rebound with a rally. They note that much of stocks’ recent gains have come as the market makes up the precipitous losses that followed the terrorist attacks. Investors have shown limited faith in the gains, selling stocks periodically for fear the run-up won’t continue.
Also, economic data remain mixed and unemployment continues to be a problem. The National Bureau of Economic Research reported yesterday what a lot of people have suspected that the United States entered a recession in March.
In trading yesterday, online retailers led the market higher on stronger-than-expected holiday business.
Yahoo advanced $2.34, or 14.9 percent, to $18.07 after posting Thanksgiving weekend sales rose more than 75 percent from a year ago. Amazon.com rose $3.13, or 34.5 percent, to $12.21 on similarly robust reports.
Other tech stocks were strong, too. Intel rose 81 cents to $31.87 on the announcement of a new technology that will make chips more efficient.
Energy stocks were weaker, as investors watched to see whether Russia would reduce its oil production further to help stabilize world oil prices. ExxonMobil dropped 67 cents to $37.77.
Advancing issues narrowly led decliners on the New York Stock Exchange with volume coming to 1.40 billion shares.
Total consolidated volume Friday was 513.85 million shares as the market closed early because of the Thanksgiving holiday.
The Russell 2000 index gained 2.80 to 461.22.
Overseas, Japan’s Nikkei stock average rose 3.4 percent. In Europe, Germany’s DAX index dropped 0.7 percent, Britain’s FT-SE 100 was up 0.2 percent and France’s CAC-40 fell 0.2 percent.