The Nasdaq composite index vaulted to its fourth straight closing high today, finishing above 3000 for the first time ever. A confluence of factors--new business alliances, strong profits and an improved outlook for interest rates--boosted the technology stocks that dominate the Nasdaq.
The Nasdaq gained 46.88 to close at 3028.51. The index began 1999 by setting a record of 2208.05, and has risen 37.2 percent since then.
Most other stock indicators had more modest gains today, as the rally failed to carry over to the broader market. The Dow Jones industrial average rose 27.22, to 10,609.06, and the Standard & Poor's 500 rose 7.19, to 1354.93.
"The rest of the market is sort of lamely following the technology stocks," said Eugene G. Mintz, financial markets analyst at Brown Brothers Harriman & Co. in New York. "Most stocks are not actively participating."
Tech stocks drew support from rising perceptions that the economy's rapid growth hasn't aggravated inflationary pressures. A report today showed that orders to U.S. factories fell sharply in September as demand weakened for airplanes, cars and industrial equipment.
The Commerce Department said factory orders declined a bigger-than-expected 0.9 percent in September, after a 1.3 percent rise the month before. Separately, the Conference Board said the index of leading economic indicators, its monthly gauge of future economic activity, fell slightly in September.
The data could bolster arguments that the Federal Reserve doesn't need to raise interest rates again to slow the economy and contain inflation.
Qualcomm leaped 29-11/16, to 260-7/16, after reporting late Tuesday that its profit in its fiscal fourth quarter almost quadrupled. The company also announced a 4-for-1 stock split.
Two high-tech firms benefited from major new alliances with automakers. Commerce One soared 46-15/16, to 254, after announcing it will help General Motors launch a "virtual marketplace" on the Internet for suppliers, dealers and other businesses.
Oracle rose 4 1/4, to 57-5/16, after announcing it has formed a venture with Ford to link the automaker's entire supply chain of 30,000 businesses over the Internet.
Much like the Dow, the Nasdaq is crossing thousand-point milestones with increasing speed. The Nasdaq, which was created on Feb. 8, 1971, closed above 1000 for the first time on July 17, 1995. The index closed above 2000 for the first time on July 16, 1998.
Outside the technology sector, drug stocks rose following the news that American Home Products and Warner-Lambert are in negotiations to merge in a $65 billion deal. Shares of American Home Products gained 5-7/16, to 55-13/16, and Warner-Lambert rose 5 5/8, to 83-13/16.
The merger talks set off a wave of speculation about further consolidation among drug stocks, boosting Eli Lilly 3, to 71 7/8, and SmithKline Beecham 5-3/16, to 67.
Beyond the technology and drug sectors, however, many stocks were little changed.