Technical rally lifts US stocks

  • Business
  • Sunday, 14 Sep 2003

NEW YORK: Stocks rose in moderate trading volume on Friday, as a late afternoon technical rally lifted stocks from week-low levels. 

Technical support levels were triggered, traders said, after investors sold off shares on weak economic reports and lacklustre licensing news from tech heavyweight Oracle Corp.  

“It's a little bounce off some support levels, nothing more than that,” said Peter Boockvar, equity strategist at Miller Tabak & Co. 

The Dow Jones industrial average closed up 11.79 points, or 0.12%, at 9,471.55. The broader Standard & Poor's 500 Index rose 2.21 points, or 0.22%, to 1,018.63. The technology-laced Nasdaq Composite Index closed up 8.95 points, or 0.48%, at 1,855.04. 

Advancers outnumbered decliners 1.5 to 1 on the New York Stock Exchange as 1.2 billion shares were traded. Advancers outpaced decliners 1.3 to 1 on Nasdaq, with 1.7 billion shares traded. 

Earlier in the session, the Dow hit its lowest level this month and the S&P 500 hit a low not seen since Sept 2. Nasdaq fell close to the September low hit on Thursday. 

Despite the late rally, all three indexes ended lower for the week. The Dow fell 0.33%, Nasdaq fell 0.17% and the S&P 500 fell 0.27%. 

Fuelled by expectations of an economic rebound in coming months, stocks have run sharply higher in recent months, peaking early this week. So far this year, the Dow is up 13%, Nasdaq is up 39% and the S&P 500 is up 16%. 

But with evidence of recovery still patchy, investors have become nervous that the market has moved too far, too fast. 

“The market will remain in a trading range,” said Jeff Swensen, senior trader at John Hancock Funds. “We do have a recovery in place, but it's not as robust as what's priced into the market.” 

Investors are waiting for companies to say they will start hiring and increase spending before they believe the economy has reached the next stage of its recovery, said Swensen. 

Stocks traded lower for most of Friday's session, after the government reported total retail purchases rose only 0.6% in August, far less than the 1.4% gain economists had been expecting. Excluding automobiles, retail sales rose 0.7%, mostly in line with forecasts for a 0.8% rise. 

Economists pay special attention to consumer spending because it powers about two-thirds of economic growth. 

Early trading was also soured by Oracle, the world's second-largest software company. It reported a 28% jump in quarterly profit, but a surprise 7% decline in new licence sales disappointed investors. 

Oracle also said it expects a modest uptick in its current-quarter revenues but new licence sales could continue to drag. Oracle shares fell 43 cents, or 3.3%, to US$12.55. 

Microsoft Corp. MSFT.O> helped lift the market, as investors welcomed the software giant's move to double its annual dividend. Microsoft shares ended up 50 cents, or 1.8%, at US$28.34. – Reuters 

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