Dow closes higher, Nasdaq down
NEW YORK (CNN/Money) -- An attempt at a broad rally petered out by the close Monday, with the Dow Jones industrial average closing higher but the Nasdaq losing ground, as investors failed to build on gains inspired by Wal-Mart in the face of mixed techs and international conflicts.
The Dow Jones industrial average gained 55.73 to 9,645.40; it had been up nearly 130 points earlier in the day. The Nasdaq composite fell 4.79 to 1,530.69; it had been up as much as 17 points earlier. The Standard & Poor's 500 index added 3.21 to 1,030.74.
"Giving back half of the rally probably sets us up for neutral trade tomorrow (Tuesday)," Ted Weisberg, trader at Seaport Securities told CNNfn's Street Sweep. "The silver lining is that what's being created before our eyes are some pretty compelling and attractive values."
No. 1 retailer Wal-Mart Stores (WMT: up $1.97 to $56.40) said June sales got a boost from warm weather last week. The company said its Wal-Mart division would report June sales at stores open a year or more at the high end of its 5 to 7 percent target range. The Dow's other retailer, Home Depot, also posted a solid advance.
Shares of Merck (MRK: up $1.62 to $54.30) and 3M (MMM: up $1.56 to $126.00) also boosted the Dow, but gains were countered by losses in IBM (IBM: down $1.50 to $76.80).
Concerns about international tensions continue to hang over markets.
Attorney General John Ashcroft said officials had captured a U.S. citizen with alleged connections to al-Qaeda who planned to build and explode a bomb with radioactive material in the United States.
"The political situation starts to cool a little, but then we get the Ashcroft news and the market freaks out," said Jack Baker, head of equities at Putnam Lovell Securities.
On an up note, Banc of America chief investment strategist Thomas McManus upped the equity portion of his model portfolio to 55 percent from 50 percent.
AMD releases new chip
Chipmaker Advanced Micro Devices (AMD: up $0.08 to $9.89) released a new Athlon chip Monday that is smaller and faster than its predecessors. Intel (INTC: down $0.93 to $21.07) is expected to release a new chip Wednesday, suggesting that the semiconductor industry continues to thrive despite the recent downturn in prices of chip stocks.
U.S. electronic share trader Instinet (INET: up $0.05 to $7.10) will buy rival Island ECN in a $508 million all-share deal, creating the largest alternative electronic trading network in stocks listed on the Nasdaq.
Handheld device maker Palm (PALM: up $0.27 to $1.49) was very active after the company said it will launch a Chinese-language version of its operating system within a year and that it hopes to win at least a 20 percent market share within two years of entering China.
But the tech news didn't add up to a big reason to buy as far as investors were concerned.
"There are a couple of tech conferences this week and some economic reports due, but other than that, the problem is there's just no real catalyst right now," said Troy Nickerson, co-head of Nasdaq trading at Robertson Stephens.
Middle East news
In addition to Ashcroft's announcement, developments in the Middle East continued to make news. Israeli forces moved into the Palestinian town of Ramallah, while Prime Minister Ariel Sharon met with President Bush.
But a little progress was made in the India-Pakistan dispute. India said it has lifted the ban on commercial flights to Pakistan in the first of what is expected to be a series of steps aimed at defusing the rancor between the two nuclear powers.
The easing of those tensions could provide a catalyst this week, according to Peter Cardillo, director of research at Global Partners Securities. "Barring any big surprises with the geo-political situation, the market could set a stabilization base for the next few days, and then maybe get a little lift off all the late-week economic data we're expecting."
Among the reports due later this week are May readings on wholesale prices and retail sales.
Treasurys were higher, pushing the 10-year note yield down to 5.03 percent.
In global trade, European stocks were higher, thanks to tech and telecom gains. Asian markets closed higher, with the exception of Japan. The dollar was a little stronger versus the yen and the euro.
Light crude oil futures fell 46 cents to $24.29 a barrel in New York. Gold futures declined $5.80 to $319.50 an ounce.
Market breadth was mixed. On the New York Stock Exchange, advancers edged decliners as 1.21 billion shares changed hands. On the Nasdaq, losers edged winners 9-to-8 as 1.50 billion shares traded.
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