"Investors like to be involved in companies that are likely to be acquired or make acquisitions," said Bill Rubin, of Keefe Managers. "We'll see consolidation return next year as a main driver for financial stocks."
Rubin's firm owns options to buy insurance stocks. This morning, he added to his holdings in Hartford Financial Services Group and Chase Manhattan.
The Dow Jones Industrial Average advanced for a fourth time in five days, rising 172.56 to close at 10,470.25. The Standard & Poor's 500 Index rose 18.04 to 1,301.65. The Nasdaq Composite Index climbed 14.57 to 2,816.52, while the CNET Tech Index gained 12.66 to 2,122.1. Almost two stocks rose for every one that fell on the New York Stock Exchange.
For the week, the Dow rose 4.5 percent, the S&P 500 4.4 percent, and the Nasdaq 3.1 percent.
The Dow and S&P had their biggest weekly gains since July 2; last week, the two market measures had their biggest declines in a decade.
The Dow fell below 10,000 for a second day on Monday, a milestone it first topped on March 16. The average is little changed for the month, although only two days have passed without 100-point moves.
Some 951 million shares changed hands on the Big Board, up from the three-month daily average of 766 million.
The Nasdaq pared its gain late in the day amid speculation that Cisco Systems' fiscal first-quarter earnings would fall short of analysts' estimates. Uri Landesman at Aaron Fleck & Associates said he had heard the talk about Cisco but doubted it was true.
"Given all the conversations I'm having with people who buy Cisco's equipment, it would be a very big surprise to me" if the company's earnings disappointed investors, said Landesman, who owns Cisco shares. Cisco, which reports earnings November 9, said it hasn't communicated any change in its outlook to investors or analysts.
Cisco fell 2.63 to 66.56 after rising to 70.94 during the session.
Sycamore Networks rose more than sixfold in its first-day trading. The maker of software that lets fiber-optic networks expand their ability to transmit data gained 146.75 to 184.75. Shares of the Chelmsford, Massachusetts-based company climbed as high as 270.88 in the first few minutes of trading, the largest one-day gain ever for an IPO.
"This is where you can get the best connectivity," said Richard Begun of Orbitex Management. "The benefits of fiber-optics become more apparent--that's why investors are just dying to get it." Orbitex bought shares of Sycamore in the IPO.
Intel rose 1.75 to 73.44, leading the Nasdaq Composite's advance. The world's largest semiconductor maker said it will start selling a range of faster chips on Monday in an attempt to regain the lead for top processor speed from rivals. The new Pentium III chips will run faster than Advanced Micro Devices' Athlon chips.
IBM gained 2.88 to 93.94. The computer maker tumbled yesterday after it said customers are delaying purchases as the turn of the millennium approaches.
Of the 304 companies in the S&P 500 that have reported third-quarter earnings so far, 61.5 percent have topped analyst expectations, according to First Call/Thomson Financial. That compares with 64.6 percent at this point in the second quarter.
Today, three S&P 500 companies reported earnings. On average, earnings grew 24.2 percent year over year and were 3 percent above estimates.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
Play video
There are currently no comments for this post.