Posted at 11:40 a.m., Tuesday, May 01, 2001

Optimism reflected in Dow Jones finish

Associated Press

NEW YORK — Another wave of optimism swept over Wall Street today, carrying stocks higher and lifting the Dow Jones industrials to their highest level in nearly three months.

Market watchers said the market's advance reflected growing sentiment that the worst is over and that the Federal Reserve will cut rates for a fifth time this year when it meets May 15.

"There's a general feeling that the market has begun to act much better ... and it's a little safer to do some buying," said Todd Clark, co-head of listed trading at WR Hambrecht. "But I'm hard pressed to find any news or earnings to explain these gains."

The Dow Jones industrial average closed up 163.37 at 10,898.34, or 1.5 percent, according to preliminary calculations. It was the blue chip index's highest close since Feb. 13, when it reached 10,903.32.

Broader stock indicators also were higher. The Nasdaq composite index climbed 52.03 to 2,168.27, nearly 2.5 percent, adding to a two-day winning streak. The Standard & Poor's 500 index was up 16.99, or 1.4 percent, at 1,266.45.

The rally appeared to be the latest extension of the momentum that began in early April on Wall Street. Convinced that stock prices will start to recover by early 2002, many institutional and individual investors have gradually been returning to the market.

Most spectacularly, the battered Nasdaq has risen more than 32 percent from its closing low for the year, 1,638.80, reached on April 4.

Although the market has had some down days, for the most part it has kept its gains — an encouraging sign to many analysts.

Trading volume was light. Advancing issues led decliners 8 to 7 on the New York Stock Exchange. Volume came to 1.16 billion shares, compared with 1.22 billion yesterday.