U.S. STOCK MARKET NYSE AND NASDAQ SUMMARIES--W/ENDING NOVEMBER 08, 2002
LAST WEEK ended on a whimper after strong beginnings. Hopes of a strong rally was derailed as the Dow hung on to a 19 point gain to finish a fifth week in positive territory while the Nasdaq slipped 2 points to halt a four week advance. With mixed economic reports and renewed concerns over the prospect of a war with Iraq, the U.S. stock market again showed its instability in the hands of jittery investors. Investors basked in the positive trend of previous weeks as the Dow added 54 points (0.6%) to 8572 on Monday amid news of Microsoft's triumph in the antitrust settlement with the government. The company rose $3.10 to $56.10 and also triggered a rise in other computer related shares such as Cisco, IBM, Applied Materials and Intel. Consumer shares did not fare as well and there was a decline of notable industry giants including Coca-Cola (KO -$1.13 to $45.70), Procter & Gamble (PG -$1.49 to $86.50) and Wal-Mart (WMT -$1.10 to $53.45). The Nasdaq also rose by an encouraging 36 points (2.6%) to 1397 in a day of heavy trading, 1.6 billion shares on the NYSE and 2.4 billion on the Nasdaq. The charge continued on Tuesday with the Dow adding 106 points (1.2%) to 8678 while the Nasdaq edged a mere 4 points higher to 1401 hobbled by declines in IBM and Applied Materials, the latter having advised of imminent job cuts from a severe slump in sales. Trading was moderate, 1.3 billion on the NYSE and 1.7 billion on the Nasdaq.
The highly anticipated rate cut by the Federal Reserve and a somewhat surprising congressional majority by the Republicans sent stocks soaring at midweek. It was the first rate cut in nearly a year, with benchmark rates lowered to 1.25%, the lowest since 1961. The resignation of the chairman of the Securities and Exchange Commission also seemed to fuel market activity. The Dow surged 93 points (1.1%) to 8771 and the Nasdaq added 18 points (1.3%) to 1419. Drug shares climbed after the industry was upgraded by Goldman Sachs analyst James Kelly in anticipation of an easing of regulatory pressures. The indices declined on Thursday as investors locked in their profits despite favourable economic news that weekly unemployment figures were lower and sales at retail chains were better than expected. The downward trend began at opening bell and deteriorated as the session progressed. Cisco (CSCO -$0.61 to $12.35) warned that revenues would be lower than previously forecast and set the tone for a decline in the chip sector and computer related stocks.
The banking sector also suffered from the after effects of the cut in interest rates as Citigroup lost $1.44 to $36.45 while Bank of America shed $2.79 to $67.44. J.P. Morgan Chase (JPM -$1.46 to $20.66) tumbled nearly 7% on speculation that it had suffered losses on gold trading, though the rumour was denied by a spokesman for the company.
Contributed By Jennifer Mendes for the Research Department of Alliance Investment Management Limited
