NewsMax.com Wires
Tuesday, July 30, 2002

Bargain-hunting across the board, including the hitherto weakened high-tech sector, bolstered the blue-chip Dow by a whopping 447.49 points, or 5.41 percent, to close at 8,711.88. The tech-heavy Nasdaq composite index jumped up 73.10 points, or 5.79 percent, to 1,335.22.

The broader New York Stock Exchange composite index gained 23.87 points to 484.71. The Standard & Poor's 500 index increased by 46.11 points to 898.95. The American Stock Exchange composite index soared 27.61 points to 826.39. The Wilshire 5000 Index soared 434.50 points to 8,526.13.

But trading volume remained relatively low, with the Big Board seeing an estimated 1.77 billion shares, while Nasdaq volume reached 1.92 billion shares.

Ralph Acampora, managing director of global equity research at Prudential Securities, said: "We believe that the market's indicators are lining up for a good rally. Now only 20 percent of all stocks are above their 200-day moving average; the last time it was this low was at the market's bottom in October 1998.

"We believe that the accelerated downtrend in most indices and individual stocks sets the stage for an advance of 15 percent to 20 percent over the near term. In our view, this is a very tradable environment," he said.

Dollar Rebounds

Supporting the broader bullish sentiment was a resurgent U.S. dollar. Pummeled in recent months, the greenback jumped to a three-week high against the euro and Japanese yen even as Qwest Communications announced it is restating three years' worth of results.

The dollar climbed to 119.83 yen, and the euro fell as low as 98.07 cents in Monday's trading. A turnaround in the value of the dollar could make stocks more appealing to overseas investors, whose selling has added to he market's problems this year.

Meanwhile, semiconductor stocks received a boost from encouraging words from Merrill Lynch analyst Joseph Osha.

Recovery for Semiconductors

Osha said in a note that the firm had reprised its valuation outlook on the sector. Its estimates now forecast a modest recovery for the sector.

"We currently forecast what we believe is a reasonable recovery, which includes assumptions for slightly below-average sequential growth in the third quarter of 3 percent, above average sequential growth in the fourth quarter of 4 percent, and a fairly typical first-year recovery in 2003," Osha said.

The firm maintained a neutral rating on the sector.

Meanwhile, U.S. Treasury prices tumbled. The 10-year bond fell 1 23/32 to 102 14/32. Its yield, which moves in the opposite direction of its price, jumped to 4.56 percent from 4.38 percent late Friday.

In Europe, stock prices ended sharply higher in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index jumped 186.10 points, or 4.63 percent, to 4,202.70. The German DAX index climbed 280.78 points, or 7.85 percent, to 3,859.78. The French CAC-40 index rallied 223.27 points, or 7.04 percent, to 3,395.83.

European shares were lifted by a rebound in auto stocks, led by BMW and DaimlerChrysler. Drug stocks were also supported by increased demand for AstraZeneca and GlaxoSmithKline. Telecom issues were boosted STMicroelectronics and Alcatel Optronics.

Increase in Asia

Earlier in Asia, prices on the Tokyo Stock Exchange ended higher as Friday's rise on Wall Street and a surge in the U.S. dollar against the Japanese yen ignited buying of export and high technology issues. Japan's blue-chip Nikkei Stock Average of 225 selective issues, which plunged 338.88 points Friday, rose 75.64 points, or 0.80 percent to 9,666.67.

Analysts said stocks were supported by Friday's 1.0 percent rise in the Dow Jones average and the 0.80 percent gain on the Nasdaq stock market.

Stocks drew additional support as the dollar rallied above the 119.00 yen level in Asian trading, prompting buying of shares in exporters.

But, despite the rebound, the Nikkei 225 closed around 200 points off its high for the day.

Profit taking kicked in once initial buying ran its course, reflecting concerns over the outlook for U.S. stocks, traders said.

Tax Cuts in Japan?

Meanwhile, local investors cautiously welcomed Prime Minister Junichiro Koizumi's call for tax cuts of more than 1 trillion yen next fiscal year to revitalize the sagging economy.

Elsewhere in Asia, prices on the Hong Kong Stock Exchange ended higher, lifted by strength in property and export issues. The blue-chip Hang Seng Index, which sank 111.66 points Friday, jumped 202.87 points, or 2.08 percent, to 9,975.99.

Analysts said stocks rallied, tracking the uptick on Wall Street, with investors buying recently beaten down property stocks and exporters.

Meanwhile, prices on the Taiwan Stock Exchange ended slightly higher as strength in electronics related issues was offset by weakness in foundry leaders. The Weighted Index, which dropped 189.73 points Friday, added 3.10 points, or 0.06 percent, to 4,858.44.

Prices also ended slightly higher on the South Korean Stock Exchange as exporters rose following Friday's gains on Wall Street and some renewed optimism over the country's export business. The blue-chip Kospi Composite Index, which fell 25.68 points Friday, rose 2.51 points, or 0.36 percent, to 700.35.

South Korea's export of electronics products is likely to increase by 21 percent to $62.3 billion in 2002, the Commerce Ministry forecast.

Elsewhere around the Pacific region, prices ended higher in active trading on the Australian Stock Exchange, lifted by strength in the telecom sector. The blue-chip All Ordinaries Index, which dropped 49.50 points Friday, rose 43.10 points, or 1.47 percent, to 2,984.20.

Copyright 2002 by United Press International.

All rights reserved.

A product that might interest you:
FREE: Get MoneyNews e-mail alerts - get the latest business news