| [ economics ] in KIDS 글 쓴 이(By): pictor (홍헌수) 날 짜 (Date): 1999년 5월 29일 토요일 오전 02시 43분 16초 제 목(Title): [주식] Stocks rise as rate fears ebb NEW YORK (CNNfn) - An unexpectedly mild regional manufacturing report soothed Wall Street's inflation fears Friday, pushing stocks bruised in the previous day's selling higher in relieved but narrow pre-holiday trading. The Chicago Purchasing Management Index, a precursor for the National Association of Purchasing Management (NAPM) Index due Tuesday, fell to 57.9 in May from 63.3 a month earlier. The index, a key indicator of manufacturing activity, suggested a slowdown and helped ease investors' lingering inflation fears, which in turn quelled anxiety that the Federal Reserve could hike interest rates soon. Shortly before 11:30 a.m. the Dow Jones industrial average jumped 112.23 points to 10,579.16. On the New York Stock Exchange, advances led declines 1,746 to 843 as trading volume reached 243 million shares. The Nasdaq Composite rose 31.52 points, or nearly 1.3 percent, to 2,450.67 and the S&P 500 index gained 19.85 to 1,301.26. (Click here for a look at today's list of CNNfn's market movers.) Investors gradually headed for the market's exits ahead of the three-day Memorial Day weekend, leaving trading muted and exaggerating stocks' apparent show of strength. U.S. bond and currency markets close early Friday, and all U.S. financial markets will be closed Monday for the Memorial Day holiday. The bond market also turned around from a lower opening, embarking on a small rally after the NAPM release. The bellwether 30-year Treasury bond rose 7/32 of a point in price to yield 5.83 percent, although, as in the stock market, light trading activity magnified the gains. The dollar eased slightly against the euro but recouped some lost ground against the yen. Rate hopes buoy banks The bond market's restored spirits bled into the stock market, where investors turned away from the threat of rising interest rates, instead padding their portfolios in relief. Banking stocks, as the sector most acutely sensitive to shifting rates, got a particularly strong boost from both the rebound in bonds and the bargain hunting on Wall Street. Among the Dow financial components, Citigroup (C) surged 2-1/4 to 65-11/16 and J.P. Morgan (JPM) added 2-5/16 to 137-7/16, while American Express (AXP) rose 2-1/4 to 119-1/8. However, Larry Rice, Josephthal chief investment strategist, said the gains were unsurprising in the wake of Thursday's 240-point Dow downturn, the worst this year. In that light, he called the rebound "anemic" and warned that bond yields would have to show more sustained improvement before the stock market can move upward again. Rice does not expect the Fed to raise interest rates when it next meets June 29 and 30, but said rates will most likely remain steady until more evidence of rising labor costs piles up. Techs switch on Bargain hunters also returned to technology stocks, which joined financial shares Thursday in leading the market's precipitous retreat. Microsoft (MSFT) shares gained 1-1/2 to 79-7/8, Cisco Systems (CSCO) edged up 5/8 to 108-5/8 and Intel (INTC) added 1/2 to 53-9/16. Computer makers were mixed, however, as the shadow of Thursday's bearish comments on the industry from Merrill Lynch analyst Steve Milunovich lingered. Milunovich told investors he expects pricing pressures on the leading personal computer companies to increase as sales growth fades, hurting corporate profit outlooks. Elsewhere in the sector, software firm Computer Associates (CA) got a lift from better-than-expected earnings, climbing 3-1/16 to 47-1/16. Many of the day's other newsmakers traded lower as investors focused on negative corporate news. Among the day's big losers, shipbuilder Newport News (NNS) tumbled 5-3/16, or more than 15 percent, to 27-9/16 after the New York Times suggested in an article that the company's merger with defense contractor Litton (LIT) may be in jeopardy because of possible Pentagon objections. Litton's shares gained 2 to 64-3/4. Dow component Eastman Kodak (EK) shed 5/8 to 68-3/16 after the Wall Street Journal reported the maker of film and photographic supplies is losing market share to Japanese rival Fuji, which continues to cut prices ahead of the summer holiday season. Kodak responded by calling the report "short-term in focus." American depositary receipts (ADRs) of Fuji (FUJIY) rose 1-1/8 to 36. Another Dow member, General Motors (GM), headed higher as the company prepares to spin off its remaining 80.1 percent stake in Delphi (DPH). GM's shares climbed 3-1/2 to 72 and Delphi's stock eased 13/16 to 19-11/16. -- by staff writer Malina Poshtova Zang with Robert Scott Martin |