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The Honolulu Advertiser

Posted at 12:20 p.m., Friday, November 2, 2001

Stocks mostly higher despite jobless report

Hawai'i Stocks
Updated Market Chart

By Amy Baldwin
Associated Press

NEW YORK — Betting that the economy won't get much worse and that business will improve next year, investors pushed the stock market mostly higher today for a second straight day. In focusing on the future, the market set aside its disappointment over a surge in unemployment.

Analysts said investors for the most part shrugged off the jobless report because they believe the economy will turn around in 2002 thanks to this year's nine interest rate cuts and the possibility of a tax cut package pushed by President Bush. The market, which also looked past yesterday's reports of big drops in consumer spending and manufacturing activity, is also increasingly hopeful about the government's retaliation for the Sept. 11 terrorist attacks.

"There's a whole bullish case revolving around the notion that we will be successful in degrading the terror threat, and our economy can expand again, and that 2002 will be better than 2001," said Joseph V. Battipaglia, chief investment strategist at Gruntal & Co.

The Dow Jones industrial average closed up 59.64, or 0.6 percent, at 9,323.54, according to preliminary calculations. The blue chips, which recovered from an earlier 54-point loss, added to their 188-point surge yesterday.

But the broader market finished narrowly mixed. The Nasdaq composite index slipped 0.57, or 0.03 percent, to 1,745.73, while the Standard & Poor's 500 index gained 3.10, or 0.3 percent, to 1,087.20.

News that the nation's unemployment rate soared to 5.4 percent in October, a 0.5 percent rise over September, pushed the entire market lower early today. Investors were disturbed to hear that it was the biggest one-month jump in joblessness since May 1980 as a massive 415,000 jobs were eliminated last month and it's the highest unemployment rate since December 1996.

Investors later resumed buying, and analysts said they were focused on expectations for next year. In fact, the market rewarded companies that announced layoffs, believing such steps will help boost profits. Boeing, which announced it will speed up its plans to lay off thousands of workers, rose $1.16 to $34.35.