Nasdaq Rout Turns to Rally After 3000 Level Is Tested
The Nasdaq Composite Index came close to crossing 3000 again -- this time from the wrong direction. But the shock of revisiting the milestone apparently helped persuade some investors to step in and buy, turning a potential stock-market rout into a rally.</br></br>The buying began after the technology-dominated index fell within a hair of the 3000 level that it had crossed triumphantly on Nov. 3 of last year, on its way to 4000 and then 5000 by this past March. All of those previous gains set the stage for the sharp declines that tech stocks have suffered in the past two months. Yesterday's flood of money surged back into the market after a morning decline sent the Nasdaq composite as low as 3042.66.</br></br>The Nasdaq index closed up 106.06 points, or 3.35%, at 3270.61. It had been down 121.89 at midday, so the total swing from low to close was 227.95 points. Names such as Intel, Cisco Systems and Sun Microsystems were in demand.</br></br>"The violence of the rally caught everyone off guard," said Rob Cohen, co-head of listed trading at Credit Suisse First Boston. "You might have set a low level for the short term."</br></br>Still, traders said the volatile market could retest the Nasdaq 3000 level again later. But after days of weak demand for stocks, they said, the return to strong volume was a positive sign. On the New York Stock Exchange, trading volume exceeded one billion shares for the first time since May 2.