U.S. stocks surge as investors dump bonds
WEDNESDAY, AUGUST 14, 2002 3:08 PM
- Reuters U.S. Company News
(Updates to late afternoon)
NEW YORK, Aug 14 (Reuters) - Stocks jumped in late afternoon on Wednesday as investors dumped high-priced bonds for stocks, taking advantage of lower share prices after declines on Tuesday followed a warning about economic weakness from the U.S. Federal Reserve.
The deadline for executives to sign off on their companies' balance sheets also brought investors back to stocks on hopes the pledge would restore trust to a market slammed by worries about corporate malfeasance. Others attributed the sudden climb to computerized programs that buy stocks whenever they fall to a certain level.
"Everyone's been worried about these companies," said Todd Leone, head of listed trading for SG Cowen Securities. In addition, he said, "yesterday we got an overreaction to the Fed and program trading" is also driving gains.
The Dow Jones industrial average (26099400) was up 12.11 points, or 0.14 percent, at 8,494.50. The broader Standard & Poor's 500 Index (SPX) was up 9.33 points, or 1.06 percent, at 893.54. The technology-laced Nasdaq Composite Index (COMP) was up 25.53 points, or 2.01 percent, at 1,294.81.
Major stocks gauges fell more than 2 percent on Tuesday after the Fed left interest rates at 40-year lows.
But investors started to trickle back into stocks as prices of longer-dated U.S. Treasuries raced higher for the fourth straight session. Expectations of lower official interest rates in the future brought the 10-year Treasury note's yield to almost a 40-year low, traders said.
"What you have is asset allocation out of bonds and into stocks," said Brian Pears, head of equity trading at Victory Capital Management. "Bonds had a tremendous move after the Fed did nothing ... and you saw a big rally out of stocks into bonds yesterday."
Also boosting some enthusiasm for stocks was a required corporate sign-off on companies' financial results.
The U.S. Securities and Exchange Commission has required executives at nearly 1,000 of America's largest companies to sign off on the statements on or soon after Aug. 14 as corporate scandals roil Wall Street.
"The selling exhausted itself," said Michael O'Hare, head of block trading at Lehman Brothers in reference to a sudden climb in market indexes that erased a 1 percent loss in the Dow average. "It's also the day CEOs are signing off on their balance sheets. Some people are putting a positive spin on that."
In company news, data storage computer maker Network Appliance Inc. (NTAP) helped prop up technology shares with a $1.38 jump to $8.43, a gain of 19 percent. The company posted a first-quarter profit and projected a slight rise in revenue in the current quarter among muted signs of economic improvement.
Web gear leader Cisco Systems Inc. (CSCO) ticked up 56 cents to $13.93. Software leader Microsoft Corp. (MSFT) rose $1.80 to $48.84. Chip leader Intel Corp. (INTC) rose 71 cents to $17.56.
United Technologies Corp. (UTX) surrendered $2.97 to $59.50 and Boeing Co. (BA) fell $1.80 to $35.25. Aerospace companies have taken a hit after a string of bad news this week, including a bankruptcy filing by US Airways Group (U) and more job cuts from American Airlines, a unit of AMR Corp. (AMR) . AMR shares were down 49 cents to $8.25.
Wall Street got a welcome piece of data before the bell. U.S. businesses added to their inventories for the second month in a row in June, the government said in a sign that firms may be turning more optimistic about the economy's prospects.
Inventories at retailers, manufacturers and wholesalers increased by 0.2 percent in June after a matching 0.2 percent gain in May, the Commerce Department said. The two months marked a break from a trend of falling inventories that stretched from February 2001 through April 2002.
(With reporting by Elizabeth Lazarowitz)
______________________________________________
sei nicht traurig... es war doch nur geld!
WEDNESDAY, AUGUST 14, 2002 3:08 PM
- Reuters U.S. Company News
(Updates to late afternoon)
NEW YORK, Aug 14 (Reuters) - Stocks jumped in late afternoon on Wednesday as investors dumped high-priced bonds for stocks, taking advantage of lower share prices after declines on Tuesday followed a warning about economic weakness from the U.S. Federal Reserve.
The deadline for executives to sign off on their companies' balance sheets also brought investors back to stocks on hopes the pledge would restore trust to a market slammed by worries about corporate malfeasance. Others attributed the sudden climb to computerized programs that buy stocks whenever they fall to a certain level.
"Everyone's been worried about these companies," said Todd Leone, head of listed trading for SG Cowen Securities. In addition, he said, "yesterday we got an overreaction to the Fed and program trading" is also driving gains.
The Dow Jones industrial average (26099400) was up 12.11 points, or 0.14 percent, at 8,494.50. The broader Standard & Poor's 500 Index (SPX) was up 9.33 points, or 1.06 percent, at 893.54. The technology-laced Nasdaq Composite Index (COMP) was up 25.53 points, or 2.01 percent, at 1,294.81.
Major stocks gauges fell more than 2 percent on Tuesday after the Fed left interest rates at 40-year lows.
But investors started to trickle back into stocks as prices of longer-dated U.S. Treasuries raced higher for the fourth straight session. Expectations of lower official interest rates in the future brought the 10-year Treasury note's yield to almost a 40-year low, traders said.
"What you have is asset allocation out of bonds and into stocks," said Brian Pears, head of equity trading at Victory Capital Management. "Bonds had a tremendous move after the Fed did nothing ... and you saw a big rally out of stocks into bonds yesterday."
Also boosting some enthusiasm for stocks was a required corporate sign-off on companies' financial results.
The U.S. Securities and Exchange Commission has required executives at nearly 1,000 of America's largest companies to sign off on the statements on or soon after Aug. 14 as corporate scandals roil Wall Street.
"The selling exhausted itself," said Michael O'Hare, head of block trading at Lehman Brothers in reference to a sudden climb in market indexes that erased a 1 percent loss in the Dow average. "It's also the day CEOs are signing off on their balance sheets. Some people are putting a positive spin on that."
In company news, data storage computer maker Network Appliance Inc. (NTAP) helped prop up technology shares with a $1.38 jump to $8.43, a gain of 19 percent. The company posted a first-quarter profit and projected a slight rise in revenue in the current quarter among muted signs of economic improvement.
Web gear leader Cisco Systems Inc. (CSCO) ticked up 56 cents to $13.93. Software leader Microsoft Corp. (MSFT) rose $1.80 to $48.84. Chip leader Intel Corp. (INTC) rose 71 cents to $17.56.
United Technologies Corp. (UTX) surrendered $2.97 to $59.50 and Boeing Co. (BA) fell $1.80 to $35.25. Aerospace companies have taken a hit after a string of bad news this week, including a bankruptcy filing by US Airways Group (U) and more job cuts from American Airlines, a unit of AMR Corp. (AMR) . AMR shares were down 49 cents to $8.25.
Wall Street got a welcome piece of data before the bell. U.S. businesses added to their inventories for the second month in a row in June, the government said in a sign that firms may be turning more optimistic about the economy's prospects.
Inventories at retailers, manufacturers and wholesalers increased by 0.2 percent in June after a matching 0.2 percent gain in May, the Commerce Department said. The two months marked a break from a trend of falling inventories that stretched from February 2001 through April 2002.
(With reporting by Elizabeth Lazarowitz)
______________________________________________
sei nicht traurig... es war doch nur geld!
