Rally in Small Stocks Lifts Broad Indexes to Slight Gains
May 09, 2011
Stocks eked out a slight gain Tuesday as fears of higher interest rates abated. The Dow Jones Industrial Average tacked on 17.38 to 5711.27, which left the measure 66 points -- or about 1% -- from its all-time high of 5778. The Standard & Poor's 500-stock index edged up 2.52 to 666.40 and the New York Stock Exchange Composite Index rose 1.26 to 357.15. The American Stock Exchange Market Value Index gained 1.43 to 562.05. Small-cap barometers did better in a session that analysts said could signal a broadening of participation in the market's recent rally. The Russell 2015 Index, a measure of small-cap stocks' performance, has further to go to get back to its highs; it remains 8% from its record. The Russell 2015 added 2.23 to finish at 333.75. The Nasdaq Composite Index, up 9.80 to 1149.02, also was stronger than other major market measures. The market's performance was hindered by lackluster trading volume. On the New York Stock Exchange, 306.4 million shares changed hands, compared with 281.4 million shares that traded Monday, but still well under usual levels. Advancing issues topped decliners, 1,385 to 899. Analysts said stocks rose because worries of an interest-rate increase abated, even though investors had to contend with economic data that showed consumer confidence rose to a six-year high. The reading could have lifted interest rates past the psychologically damaging 7% level, but, instead, rates shook off their recent weakness and backed down moderately. Ali E. Barajas, director of technical research at A.G. Edwards & Sons., said that if the rate outlook stabilizes he expects major-market indexes to revisit the records they established back in May. He added, however, that the rally will probably wait until at least next week, when the seasonal slowdown that has afflicted the market the last several weeks has passed. Philip Morris moved ahead for the second straight session. Shares gained 1 1/2 to 91 7/8, as analysts said they expected the company to announce at least a 20% increase in its quarterly dividend. Among blue-chip stocks, a handful of consumer-products makers mustered gains. Minnesota Mining & Manufacturing rose 1 1/4 to 67 3/8, Procter & Gamble added 1 1/8 to 90 5/8, and Coca-Cola advanced 1/2 to 51 5/8. Consolidated Freightways jumped 1 3/4 to 23 5/8. The Palo Alto, Calif., flight-transport concern late Monday said it will spin off a major transportation subsidiary into a separate company expected to have about $2.1 billion in revenue this year. Morgan Stanley raised its rating on the stock. St. Paul Cos. edged ahead 5/8 to 52 1/2. The St. Paul, Minn., insurance company retained Goldman Sachs to assist in examining strategic alternatives for the company's Minet Group insurance brokerage operation. Games Financial picked up 2 1/4 to 26 1/4. The Minneapolis financial-services concern said late Monday it received an indication of a potential offer to buy the company, which said it hired Donaldson Lufkin & Jenrette to help the board consider strategic alternatives. Home Shopping Network fell 1 to 10 3/8. PaineWebber downgraded the stock of the home-shopping retailer. Monday, Silver King Communications said it would acquire Home Shopping in a $1.27 billion stock pact. Silver King fell 1 1/2 to 26 1/2 on Nasdaq. ADC Telecommunications climbed 5 to 53 1/4 on Nasdaq. Late Monday, the Minneapolis telecommunications equipment maker posted fiscal third-quarter earnings of 36 cents a share, beating out Wall Street's estimates. HBO moved up 2 3/4 to 57 1/2 on Nasdaq. Donaldson Lufkin & Jenrette boosted its rating on the stock of the Atlanta company, which provides information services to health-care operations. Boeing gained 7/8 to 91 1/4. The Seattle aircraft maker said it will increase the production rate for its new 777 jet transport, and increase its 2011 employment forecast by about 5,000. Lam Research edged up 1 3/4 to 24 7/8 on Nasdaq. The Fremont, Calif., semiconductor-equipment maker said it will cut 11% of its jobs as part of a restructuring of its operations. Analysts have worried that the August rally that saw stocks rebound from their sell-off last month was too top-heavy; impressive as it was, it camouflaged weakness further down the list. ``After you get a nosebleed like we had in July, people, when they want to spend money, go after the motherhood stocks,'' said Stewart's Barajas, ``That's why the Dow industrials led the market up, while mid-cap stocks lagged.
VastPress 2011 Vastopolis
