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The Dow Jones Industrial Average (DJIA) closed up over 445 points on Monday, or 5.4 percent, reaching 8,711.88, its third-best single-day point gain ever. Last Wednesday's 488.95 point gain and the 499.19 point gain in March 2000 are the only days that topped Monday's drive. Meanwhile, the tech-laden Nasdaq composite index saw a lift of more than 70 points, or 5.8 percent, to 1,335.25, having risen 27 points on Friday.
The market's ability to shrug off the latest accounting scandal, this time at Qwest Communications, was an encouraging sign. Indeed, despite the news, Qwest only slipped by a penny to USD1.49.
"The slide over the last couple of weeks had to come to an end at some point," said Gerry Hennigan, equity analyst at Goodbody Stockbrokers in Dublin. "But I don't think you are going to see a sustained upswing until we see some decent results, and it looks like that is not going to happen until Q3."
"There does seem to be some moves that could give the market a little more confidence," he added, but cautioned that it would the end of August before there were any commitments from CEOs.
Indeed, many US analysts agree that the threat of fiercer punishments for law-breaking company executives and directors could help restore investor faith in the wake of dozens of accounting scandals. The arrest of Adelphia executives on Wednesday for allegedly stealing from the company, as well as proposed actions from the White House and the US Congress, are the strongest indicators that the rules that govern corporate actions are changing.
Although its unclear whether the recent lift will be sustained, a number of tech stocks benefitted in Monday's buying frenzy as Morgan Stanley's high-tech index rose 18.05 points to 301.21 and the Dow Jones Internet Index gained 1.77 to 30.79. Strong growth in some individual stocks was apparent as well, including IBM, which was up by USD4.78 to USD71.18. Hewlett-Packard surged USD1.32, or 11 percent, to USD12.98.
Even the telecom sector recovered slightly, led by Sprint PCS Group, which was upgraded by Credit Lyonnais, rising USD0.54, or 18 percent, to USD3.54. Verizon Communications was up by USD1.65, or 5.7 percent, to USD30.43, and mobile equipment maker Ericsson gained USD0.08, or 9.5 percent, to USD0.92 on Nasdaq. Its competitor, Motorola, climbed USD1.19, or 11 percent, to USD12.09 and even bankrupt WorldCom had a USD0.06 lift to USD0.26.
The Philadelphia Semiconductor Index, which slumped 13 percent last week, surged by 21.82 points, or 6.9 percent, to 336.83. Intel rose USD1.08 to USD18.89, while chip-equipment giant Applied Materials gained USD0.78 to USD15.10.
Irish stocks that trade in New York fared well also. Parthus was up by 1.37 percent to USD3.70, e-learning company Riverdeep moved strongly ahead, up over 9 percent to USD14.42, while SmartForce moved up by a penny to USD3.42. Still, there remained a couple of losers among the Irish stocks in New York, including Trintech and Iona, which tumbled 3.91 percent and 4.29 percent respectively, with the two trading at USD1.23 and USD2.01 at the end of the day.
In early trading in London some of the FTSE's late gains on Monday had fallen away, and the index was down 20.6 points to 4,182.1 by 10 am. Ireland's ISEQ was also down before lunchtime, by almost 17 points, to 4117.81.
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