Posted at 11 a.m., Thursday, October 11, 2001
Surging market hits pre-Sept. 11 levels
• Hawai'i Stocks
• Updated Market Chart
Associated Press
NEW YORK — Boosted by some healthier-than-expected earnings reports, Wall Street surged higher today, carrying the Dow Jones industrials and other market indexes to levels last seen before the Sept. 11 terrorist attacks.
The Dow's close left it just 195 points below its close of Sept. 10; the blue chips have now recovered 85 percent of the 1,369 points they lost after the attacks. The Nasdaq composite and Standard & Poor's 500 indexes finished just above their closes of a month ago.
Analysts again cautioned that the advance, which followed another spurt higher yesterday, should not be read as a fundamental market recovery or a sign that investors are no longer worried about fallout from the terrorist attacks or U.S. retaliation.
"The passage of time has healed some of the wounds ... and investors are feeling a little better," said Matt Brown, head of equity management at Wilmington Trust. "This is a rebound, though.
"I think the market is still going to be pretty reactive to both good and bad news. If there were further developments domestically on the terrorism front, that would be very negative for the market."
According to preliminary calculations, the Dow finished up 169.59 at 9,410.45, extending a 188-point rally from yesterday.
Broader stock indicators were also sharply higher today. The S&P 500 gained 16.44 to 1,097.43, regaining all of the 126 points it lost after the attacks. The Nasdaq shot up 75.20 at 1,701.46, also making back all of 272 of the points it lost.
On Sept. 10, the last day of trading before the attacks, the Dow closed at 9,605.51, while the S&P 500 was at 1,092.54. The Nasdaq closed that day at 1,695.38.
Today, the one-month anniversary of the attacks, investors seemed to determine to buy. Stocks soared for most of the session, although the gains did fade briefly late in the afternoon on profit-taking. Ultimately, though, the market snapped back and stocks maintained their upward momentum.
Better-than-expected earnings news from Genentech and ETrade cheered investors who have been bracing themselves for dismal results as U.S. companies issue their third-quarter reports this month.
Investors bid biotech company Genentech up $3.50 to $44.30 after the company exceeded third-quarter expectations. E-broker ETrade also turned in a better performance than Wall Street had anticipated, sending its stock up $1.19 to $7.85.
General Electric gained $1.03 to $38.94 on third-quarter results that met expectations. And Yahoo gained $1.57 to $12.50 after meeting analysts' third-quarter projections but slightly reducing its forecast for the current quarter.
"The fact that a company like GE was able to meet toned-down expectations is again the lack of a negative being a positive for the market," said Charles G. Crane, strategist at Victory SBSF Capital Management. "The sense I have is that we could retest the September lows before the end of the year or we could do it within next four or five trading sessions. We really don't know."
Tech stocks were broadly higher, translating into a nearly 11 percent gain on the Philadelphia Semiconductor Index, which rose 46.01 to 474.60. Strong performance by the sector is considered a sign that an economic recovery could be beginning, but there have been false starts before and stock prices in the sector have fallen considerably. Ciena rose $2.76 to $15.24.
Cisco rose $1.31 to $16.46, above the price it was trading before the Sept. 11 attacks.
Pharmaceutical stocks, in turn, fell as investors cashed in gains from a sector that has done well recently when Wall Street searched for less risky investments. Johnson & Johnson dropped $1.10 to $54.94.
Investors appeared unfazed by data showing unemployment remains a problem for the economy.
The Labor Department reported that for the week ending Oct. 6, new jobless claims fell by a seasonally adjusted 67,000 to 468,000, a level suggesting a very weak job market. The more stable four-week moving average rose last week to 463,000, the highest level since Dec. 14, 1991, when the country was in its last recession.
The worst September retail sales in two decades also failed to stop the broader market's advance, chiefly because the disappointing results weren't surprising given consumers' anxieties after the Sept. 11 attacks. Gap rose 15 cents to $13.73, despite reporting a 17 percent drop in sales at stores open at least a year.
Advancing issues led decliners more than 3 to 2 on the New York Stock Exchange. Volume came to 1.34 billion shares, compared with 994.42 million at the same point Wednesday.
The Russell 2000 index rose 9.38 to 431.04.
