Updated at 2:19 p.m., Wednesday, December 5, 2001
Dow climbs above 10,000 level
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NEW YORK — U.S. stocks rallied today, driving the Dow Jones Industrial Average above 10,000 for the first time in three months, as growth at service businesses boosted optimism the economy and corporate profits will rebound next year.
The advance also lifted the Nasdaq composite index past 2,000 for the first time since early August.
Semiconductor shares including Intel Corp. and financial stocks such as Citigroup Inc. lifted the market. Software maker Oracle Corp. rose after Larry Ellison, chief executive of the third-biggest software maker, told an analysts' meeting that business has stabilized.
The surprising surge for service companies "gives credence to the belief that we will get a recovery next year," said Beth Cotner, who helps oversee $60 billion in large growth stocks at Putnam Investments Inc. A rebound in economic growth "could come sooner than the second quarter based on this data."
After a session of heavy trading, the Dow surged 220.45, or 2.2 percent, to finish at 10,114.29, according to preliminary calculations. The Dow, which rose 129 points yesterday, had not closed above 10,000 since Sept. 5, when it finished at 10,033.27.
It was also the Dow's best one-day point gain since Sept. 24, when the blue chips rose 368 after the low of 8,235.81 they reached Sept. 21.
Broader stock indicators also rose sharply. The Nasdaq composite index soared 83.74, or 4.3 percent, to 2,046.84. The tech-focused index hadn't ended above 2,000 since Aug. 7 when it closed at 2,027.29.
The Standard & Poor's 500 index gained 25.55, or 2.2 percent, to 1,170.35.
Investors' enthusiasm mounted, analysts said, as they wanted to ensure they don't miss out on the market's next upturn.
"It's like, 'We have got to go in now," said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. "You are getting momentum going. And, momentum begets momentum."
Stocks extended gains after the National Association of Purchasing Management released its non-manufacturing business index, which climbed to 51.3 last month from a record low of 40.6 in October. A reading above 50 suggests expansion. Analysts had expected the index to be at 43.
More than 1.4 billion shares traded on the New York Stock Exchange by 3:15 p.m. New York time, 67 percent more than two weeks ago. Two stocks rose for every one that fell on the Big Board.
Salomon Smith Barney Economist Steven Wieting raised his forecast for the earnings of S&P 500 companies for the first time in almost two years. "U.S. economic growth will recover quite rapidly over the course of 2002," he said to clients.
