Stocks closed higher in Monday's session on the lightest volume day of the year. A pending winter storm placed a damper on both NYSE and Nasdaq volume.
"I think in part when you have a day when it's questionable in terms of total attendance, the market has a tendency to drift," said Joseph Barthel, chief investment strategist at Fahnestock & Co.. "You're probably just getting some people who want to square away positions in case they can't make it in tomorrow."
The strategist also believes that the Nasdaq has met with oversold conditions and is due for a bounce back. With the divergence between new highs and new lows, Barthel believes that the vast majority of the damage is already done to the Nasdaq and there will likely be a rally shortly.
"I think the market is ready to give us a rally right into the Greenspan 50 basis point -- maybe 75 basis point -- cut on the 20th and maybe a tad after it," Barthel says, adding that he would not be surprised to see a two or three week rally beginning "very soon."
Brand name tech stocks made modest gains after last week's brutal selloff. Networking giant Cisco Systems (CSCO), Oracle Corp. (ORCL), and Intel Corp. (INTC), the most actively traded stocks, were all higher.
Shares in cable operators AT&T Corp. (T) and AOL Time Warner Inc. (AOL) climbed Monday following a U.S. appeals court's decision to overturn federal rulings limiting the number of cable customers one company can serve. AT&T was the biggest percent gainer on the Dow.
News of management changes at Coca-Cola Co. (KO) put a cap on the Dow's gains. The beverage maker announced a new management structure, including the resignation of COO Jack Stahl. The company says current volume and EPS expectations remain unchanged.
The Dow Jones Industrial Average ended up 95.99 points, or 0.92%, to 10562.30. The Nasdaq closed higher by 25.26 points, or 1.19%, to 2142.89. The S&P 500 ended with a gain of 7.07 points, or 0.57%, to 1241.25.
Treasuries were little changed on light volume as market participants focused on strength in the equity markets. Significant supply also weighed on the market.
In economic news, the National Association of Purchasing Managers' non-manufacturing index in February rose to 51.7 from 50.1 in January. The slight rise in the service sector indicator might point to an upward bounce in cooling growth.
Stocks in the News
The London Sunday Times reported that Amazon.com (AMZN) and Wal-Mart Stores (WMT) are in secret talks to form a strategic alliance.
CS First Boston reiterated its strong buy rating on Juniper Networks (JNPR) and states that it does not believe the company will miss its quarter.
Asian markets closed higher. In Japan, the Nikkei finished up 60.36 points, or 0.49%, to 12322.16. In Hong Kong, the Hang Seng Index rose 168.83 points, or 1.21%, to 14135.26.
European stocks closed in positive territory. In London, the Financial Times 100, ended up 72.70 points, or 1.24%, to 5931.30. U.K. PMI remained firm at 57 while EuroZone readings were soft. Also, CBI reports consumer services sentiment rose to 18-month high. In Germany, the DAX Index closed up 37.16 points, or 0.60%, to 6196.18. In France, the CAC 40 Index finished up 76.91 points, or 1.45%, to 5368.83. By Alan Hughes