Will it or won't it?
The Dow Jones Industrial Average surged after the opening bell Friday to a record intra-day high of 10,085.31. But the excitement was short-lived, and the blue-chip index soon found itself struggling to stay above the 10K bar.
It's still anyone's guess whether this will be the day the Dow finally closes above 10,000 for the first time ever.
The blue-chip index rose 27.20 points to 10024.82 in mid-afternoon trading, and the Wired Index was 2.59 higher at 634.05. The Nasdaq Composite Index shed 9.33 to 2453.63, and the S&P 500 was down 0.17 at 1316.38.
Volume is high as the so-called triple witching haunts the Street. This happens every three months when contracts expire for stock options, stock index options, and index future. In the past, the triple witching has increased the market's volatility, but in recent quarters we've seen investors seize on the occasion as a decent excuse to go shopping, driving share prices higher.
So how important is it to traders that the Dow ends the week above 10,000?
"Not as important as the financial press would lead you to believe," replied Hugh Johnson, chief investment officer at First Albany. "It looks good and makes great headlines. But if you look closely, you'll see that more stocks are falling than rising. It's not a pretty picture."
Be that as it may, investor enthusiasm was running fairly strong amid a number of surprisingly rosy earnings reports. Adobe Systems (ADBE) gained US$4.50 to $54.25 as it posted a first-quarter profit of 60 cents a share, well ahead of the anticipated 52 cents. The software developer said it's looking ahead to income of as much as 66 cents for the current three months, reaping the benefits of a recent belt-tightening that included about 300 job cuts.
Nike (NKE) finally climbed out of the fiscal doldrums with news that its quarterly income had jumped to 44 cents a share, topping estimates by 6 cents. The sneakermeister, which appears to be surviving the absence of Michael Jordan, had its stock upgraded to "buy" by BT Alex. Brown and Hambrecht & Quist.
In finance, Lehman Brothers (LEH) slipped $1.38 to $60.88 even as it reported a 13 percent increase in quarterly earnings to $1.57 a diluted share, easily whipping the expected $1.45. Investors latched onto the good news as a prime opportunity to cash in some shares ahead of the weekend.
They also may be wary of how the sector will look when trading resumes on Monday. According to Forbes magazine, Chase Manhattan is negotiating a possible merger with Merrill Lynch, which would create a decidedly formidable banking and brokering combo. Although Merrill spurned previous overtures from Chase, Forbes said the two companies have worked through their differences and may be close to reaching an accord. Chase (CMB) advanced 75 cents to $84.63, and Merrill (MER) was up $1 at $93.13.
And how are the day traders celebrating the Dow's ascent? They're throwing a party. Rather, they're throwing shares of iVillage (IVIL) back and forth as the online women's network makes its trading debut. IVillage skyrocketed 258 percent to $86 after arriving with 3.65 million shares initially priced at $24 apiece.
What fun.
