Blue-Chip Rebound Propels Stocks Higher
Investors flocked back into blue-chip stocks Tuesday, boosting the Dow Jones industrial average by nearly 175 points, as the economy continued to defy expectations with a mixture of brisk growth and low inflation.
The Dow rose 174.78, or nearly 2.3 percent, to 7,895.92, scoring its fourth-biggest point-gain ever.
Broader stock measures dominated by smaller companies rose to the latest in a series of record highs.
But analysts were more impressed with the robust gains of the battered blue-chip sector, which has yet to fully recover from last month’s downturn.
Notably, the Dow’s biggest gainer was Procter & Gamble, one of the best-performing blue chips until recently. And the Standard & Poor’s 500 index of larger companies rose 25.87, or 2.8 percent, to 945.64, moving within about 15 points of its Aug. 6 record high.
“Today is a ‘back to the blue chips’ market,” said Don Hays, director of investment strategy at Wheat First Butcher Singer in Richmond, Va., noting that advancing issues outnumbered decliners by a wider margin on the big-name dominated New York Stock Exchange than other markets.
Advancing issues outnumbered decliners by a 3-to-1 margin on the NYSE, where volume totaled a hefty 635.77 million shares as of 4 p.m., up sharply from Monday’s sluggish pace.
Some of the stocks that moved substantially or traded heavily Tuesday:
NYSE
Eastman Kodak, down 3 at 57.
The company warned late Monday that its third-quarter earnings would fall short of analyst estimates. Kodak blamed weak sales of some key products and the dollar’s continued strength against other currencies, which hurts the dollar-value of foreign revenues.
Corning, up 1-7/8 at 42-7/8.
Merrill Lynch raised its intermediate-term rating on the glass and electronics concern to “buy” from “accumulate” and named it this week’s “Focus One Stock,” the Dow Jones News Service reported, citing a contact at the investment firm.
Lucent Technologies, up 3-1/8 at 77-3/4.
Northern Telecom, up 5-1/2 at 102-15/16.
The companies presented upbeat forecasts at meetings with Wall Street analysts, the Dow Jones News Service reported.
NASDAQ
Microsoft, up 5-11/16 at 136-3/8.
The stock recovered part of Monday’s 7-point loss, which was triggered by news that Microsoft was delaying next year’s update of its Windows operating software.
Nextel Communications, up 1-3/16 at 28-11/16.
BT Alex. Brown initiated coverage of the wireless communications company with a “strong buy” rating, the Dow Jones News Service reported.