Market Wrap: Nasdaq Nears 5,000; S&P, Dow Fall With Energy

Financial Markets Wall Street
Richard Drew/AP

By Caroline Valetkevitch

NEW YORK -- The Nasdaq resumed its recent advance Thursday after deal news in the technology sector, while the Dow and S&P 500 slipped as energy shares sank with oil prices.

The day's move put the Nasdaq within just 12 points of the 5,000 mark, which it last hit in March 2000 along with its all-time high of 5,132.52 at the height of the dot-com frenzy. The Dow broke a two-day streak of record closing highs.

Among the top boosts for the Nasdaq and S&P 500 were shares of Avago Technologies (AVGO), which jumped 14.7 percent to $129.25. The company reached a deal to acquire Emulex (ELX) for $8 a share. Emulex shares surged 24.7 percent to $7.93.

%VIRTUAL-pullquote-After we had a difficult January and early part of February, earnings reinvigorated the rally and pushed [the market] higher.%Also among the day's top performers, Salesforce.com (CRM) shares climbed 11.7 percent to $70.24. The cloud software company reported quarterly earnings and raised its full-year revenue forecast.

After a sluggish start to the year, stocks have rebounded sharply in February. Both the Dow and S&P 500 are on track for their best monthly performance since October 2011, while the Nasdaq is on pace for its best month since January 2012.

"After we had a difficult January and early part of February, earnings reinvigorated the rally and pushed it higher," said Bruce Zaro, chief technical strategist at Bolton Global Asset Management in Boston. "Consumer and health care really surprised investors."

Energy shares led declines in the S&P 500 and Dow, with the S&P 500 energy index dropping 1.8 percent as U.S. crude oil futures fell 5.5 percent to settle at $48.17, pressured by rising inventories in the United States.

The Dow Jones industrial average (^DJI) fell 10.15 points, or 0.06 percent, to 18,214.42, the Standard & Poor's 500 index (^GSPC) lost 3.12 points, or 0.15 percent, to 2,110.74 and the Nasdaq composite (^IXIC) added 20.75 points, or 0.42 percent, to 4,987.89.

Broken Chain of Wins

The Nasdaq on Wednesday had broken a 10-day streak of gains.

S&P 500 earnings rose 6.8 percent in the fourth quarter, Thomson Reuters (TRI) data showed, up from a Jan. 1 estimate for growth of just 4.2 percent.

Apple (AAPL) shares gained 1.3 percent to $130.41. Apple sent out invitations for a March 9 event, about one month before the much-anticipated launch of the new Apple Watch.

Economic data was mixed. January U.S. consumer prices had the biggest drop since 2008 as gasoline prices tumbled, while weekly jobless claims climbed last week and durable goods orders rose last month. The deflation data could provide a cautious Federal Reserve the leeway to keep interest rates low for longer.

About 6.4 billion shares changed hands on U.S. exchanges, below the 6.8 billion average for the month to date, according to BATS Global Markets.

NYSE decliners outnumbered advancers 1,646 to 1,387, for a 1.19-to-1 ratio; on the Nasdaq, 1,522 issues rose and 1,192 fell, a 1.28-to-1 ratio favoring advancers.

The S&P 500 posted 41 new 52-week highs and 3 new lows; the Nasdaq composite recorded 125 new highs and 20 new lows.

What to watch Friday:

  • The Commerce Department releases fourth-quarter gross domestic product at 8:30 a.m. Eastern time.

  • The National Association of Realtors releases pending home sales index for January at 10 a.m.

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