Posted at 11 a.m., Wednesday, October 3, 2001
Dow surges back to level before attack
• Hawai'i Stocks
• Updated Market Chart
Associated Press
NEW YORK — The Dow Jones industrials closed above 9,000 today for the first time since the terrorist attacks three weeks ago, as investors heartened by President Bush's push for an economic stimulus plan sent stocks barreling higher.
The market had waffled in early trading, but rose decisively, finishing up more than 170 as Bush urged Congress, in televised remarks in New York, to approve his plan of $60 billion to $75 billion worth of tax cuts for individuals and business.
Technology stocks also moved higher after Cisco Systems chief executive John Chambers affirmed the company's outlook. The upturn on Wall Street added to a rally triggered yesterday by the ninth interest rate cut so far this year.
"People are believing that between fiscal and monetary policy the economy will stabilize," said Arthur Hogan, chief market analyst at Jefferies & Co.
The Dow surged 173.19, closing at 9,123.78, according to preliminary calculations. Blue chips rose 113 yesterday after the Federal Reserve cut rates by half a percentage point.
It was the first time the Dow broke the 9,000 level since Sept. 18, and it hasn't closed above 9,000 since the Sept. 11 terrorist attacks. The blue chips have regained nearly 900, or 65 percent, of the 1,369 points they tumbled in the first week of trading after the attacks.
The broader market also posted significant gains. The Nasdaq composite index rose 88.44 to 1,580.77, recording its biggest point gain since the attacks. The Standard & Poor's 500 index advanced 20.94 to 1,072.27.
"At least for today, investors are off the sidelines.... People are putting money to work," Hogan said.
Today's upturn was a switch for the market, which has struggled amid the fallout of the attacks — thousands of layoffs and a string of profit warnings.
"Three weeks after the greatest shock in our collective lives, there is a tremendous realization that the world is not going to come to an end," said Scott Bleier, chief investment strategist for Prime Charter Ltd.
Bleier attributed the buying to lower interest rates, the possible economic stimulus plan and steeply discounted stock prices.
Among Wall Street's winners were companies that stood by earnings forecasts. Cisco rose 21.5 percent, up $2.47 at $13.95, after CEO Chambers backed the networker's forecast for the fiscal first quarter despite a disruption in orders following the terrorist attacks.
Cisco's midafternoon news boosted the tech sector, where Microsoft climbed $3.20 to $56.25 and Intel rose $1.71 to $21.23.
Upscale housewares retailer Williams-Sonoma rose $4.85, or nearly 22 percent, to $27.05 after affirming third-quarter estimates.
Stocks rose across an array of sectors, indicating how optimistic investors were feeling about an economic recovery.
Boeing rose $2.34 to $36.59, Citigroup gained $1.23 to $43.48, and Home Depot advanced $1.78 to $40.83.
On the downside were companies that acknowledged business is slowing. Citing poor sales of its drug Prozac, Lilly lowered its earnings estimates for 2001 and 2002, and its shares fell $3.62 to $79.25.
Advancing issues outnumbered decliners slightly more than 2 to 1 on the New York Stock Exchange. Volume was 1.65 billion shares, well ahead of the 1.27 billion traded yesterday.
The Russell 2000 index of smaller company stocks rose 11.42 to 413.21.
Stocks were mixed overseas. Japan's Nikkei average closed the day down 2.1 percent. France's CAC-40 fell 0.5 percent, Germany's DAX index rose 3.1 percent and Britain's FT-SE advanced 1.0 percent.
