Wall Street’s blue Monday syndrome eased for the first time in nine weeks.
A nearly 170-point advance by the Dow Jones industrial average marked the first time since March 11 that the best-known market benchmark began a week with a gain.
If this sounds like grasping for short straws, it probably is. Major stock indexes remain stuck at flat or lower levels for the year.
The market funk in recent weeks is especially troublesome for investors because it reflects a long-running pattern that has made hash of results for the current year.
Investors often are advised to look at performance over at least a three-year period. Mutual fund tracker Morningstar initiates ratings of mutual funds with three years of performance data in hand.
The Dow broke above 10,000 in the spring of 1999 and has essentially gone nowhere since.
Stocks–as measured by the Standard & Poor’s 500 index–have staged the kind of flat results we’re now seeing over three consecutive calendar years only six times since the mid-1920s, according to Chicago-based Ibbotson Associates.
The most recent three-calendar-year period of flat results ended in December 2001, when annual three-year returns on the S&P 500 index fell an average 1.03 percent. That period included 1999, when the total return on the S&P 500 index jumped 21 percent.
But 1999, the last gasp of the bull market, is no longer in the three-year results. The S&P index is off 6 percent this year–on top of a 9 percent drop in 2000 and a 12 percent decline in 2001. Only a dramatic rally would prevent a second consecutive dismal three-year record.
The last back-to-back droughts in three-year market returns ended in 1970 and 1971.
Monday’s action: Stock prices rose in thin trading Monday, as traders anticipated upbeat economic and corporate profit reports in the next few days.
Applied Materials, a maker of semiconductor fabrication equipment, is expected to report upbeat results Tuesday. Dell Computer and Hewlett-Packard are scheduled to post results later in the week.
Last week, a positive report by computer networking giant Cisco Systems gave the market a one-day lift Wednesday. The rally faded by the end of the week.
Economists estimated April retail sales, set to be released Tuesday, rose as much as 1 percent after a weak 0.1 percent gain in March. Strong auto sales will boost the April report, economists said.
The Dow Jones industrial average rose 169.74, or 1.7 percent, to 10,109.66. The Dow closed just off its high point of the session.
The broader Standard & Poor’s 500 index gained 19.57, or 1.9 percent, to 1074.56.
After the close of New York Stock Exchange trading, shares of telecommunications giant WorldCom and US Airways sank. Standard & Poor’s announced it removed the companies from the benchmark S&P 500 index. WorldCom last week saw its credit rating cut to junk status, and US Airways said it may be forced to file for bankruptcy protection if it cannot obtain government-backed loans.
Apollo Group, a Phoenix-based adult education provider, and BJ Services, a Houston-based oil services company, were added to the index.
The Nasdaq composite index added 51.69, or 3.2 percent, to 1652.54.
The Russell 2000 index of small-company stocks rose 6.99, or 1.4 percent, to 499.72.
New York Stock Exchange volume reached 1.10 billion shares, the slowest trading since April 8. Winning stocks outnumbered losers by 5-3 among NYSE-listed issues.
Nasdaq volume totaled 1.64 billion shares, the slowest volume in a month. Winners topped losers by 3-2 among Nasdaq stocks.
Treasury securities fell as stock prices rose.
Crude oil climbed 39 cents a barrel, to $28.38, the highest level since mid-September.
Treasury auction: Interest rates rose at the latest weekly auction of 3- and 6-month Treasury bills. The discount rate for 3-month bills was 1.75 percent, up from 1.74 percent last week. The rate for 6-month bills was 1.87 percent, up from 1.85 percent last week.
The investment-equivalent yields at Monday’s auction were 1.78 percent for 3-month bills and 1.91 percent for 6-month bills.
