Wednesday, August 02, 2000

Blue chips surge on upbeat economic news




The Associated Press

        NEW YORK — Blue chip stocks moved higher Wednesday, rallying in the wake of more encouraging news that left investors optimistic the economy is indeed slowing down.

        The Dow Jones industrial average closed up 80.58 at 10,687.53.

        The Standard & Poor's 500 index was up 0.60 at 1,438.70, but the Nasdaq composite index gave back some earlier gains and closed down 27.06 at 3,658.46.

        Interest-rate sensitive Dow stocks surged after the Conference Board reported that its leading economic indicators were unchanged in June.

        “The rally came right after the numbers were released, and the feeling is that there's a relatively good chance that the Fed's not going to do anything” at its next meeting Aug. 22, said Tom Gallagher, head of U.S. equity markets for CIBC World Markets in New York.

        Banking stocks benefited on the belief that lending and underwriting activity of stocks and bonds will stay healthy if interest rates remain stable based on the positive economic indicators. Lehman Brothers rose $5.75 to $118.50, and Merrill Lynch rose $1.75 to $127.

        But on the Nasdaq a handful of widely held stocks, including Cisco Systems and Dell Computer, fell on fears that revenues may decline in the second half of 2000. Cisco fell $2.25 to $60.938, and Dell lost $2 to $39.563.

       



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- Blue chips surge on upbeat economic news