Nasdaq Highest in Nearly Two Years

Jan 5, 2004
By Denise Duclaux

NEW YORK (Reuters) - Stocks climbed on Monday, driving the Nasdaq to its highest level in nearly two years as investors returned in full force from the holidays and funneled money into the market on expectations for another solid year on Wall Street.

Investors' hopes are high for a strong earnings season despite some worries that U.S. shares may be overvalued. Aluminum heavyweight and Dow component Alcoa Inc. marks the start of the quarterly earnings period when it releases its results on Thursday.

"That will be the driving force in the month of January -- just how good the fourth-quarter earnings are," said Larry Wachtel, a market analyst at Wachovia Securities LLC. "The pre-announcement season was so benign that you know the earnings are going to be good."

The technology-laced Nasdaq Composite Index rallied 28 points, or 1.41 percent, to 2,035, hitting its highest level since mid-January 2002. The blue-chip Dow Jones industrial average rose 88 points, or 0.85 percent, to 10,498. The broad Standard & Poor's 500 Index jumped 8 points, or 0.72 percent, to 1,116.

Volume picked up after two weeks of holidays and half sessions. More than 907 million shares changed hands on the New York Stock Exchange and more than 1.4 billion on Nasdaq.

Chip shares helped lead the market higher after the World Semiconductor Trade Statistics group said global sales of semiconductors surged to $16.1 billion in November, rising 25.7 percent from a year ago and accelerating for the fourth straight month.

The Philadelphia Stock Exchange semiconductor index shot up 3.22 percent.

Intel Corp., the world's largest maker of computer chips, rose 57 cents, or 1.8 percent, to $32.73.

Software company Siebel Systems Inc. sounded a bright note before the earnings rush. The company said fourth-quarter revenue and profit would surpass its previous forecast, helped by higher license revenue. Siebel jumped $1.01, or 7.2 percent, to $15.00.

SG Cowen boosted its ratings on several technology names, including computer maker Dell Inc., software maker Microsoft Corp. and chip equipment maker Applied Materials Inc., to "strong buy" from "outperform."

Dell rose 84 cents, or 2.5 percent, to $35.14. Microsoft gained 69 cents, or 2.5 percent, to $28.14. Applied Materials advanced $1.31, or 5.9 percent, to $23.41.

Wall Street got more evidence of a strengthening economy early in the day. Construction spending advanced a surprisingly strong 1.2 percent in November to a fresh record high, a government report showed, as persistently low mortgage interest rates spurred an unprecedented rate of building. The forecast was for a gain of 0.5 percent.

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