Investors send stocks sharply up
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Associated Press
NEW YORK — Wall Street showed more signs of strength today with stocks rallying sharply on earnings reports that at best were satisfactory, not stellar. The Dow Jones industrials soared 172 points, shaking off a report indicating the economy needs more time to recover.
Analysts said investors are willing to look past poor profits and place bets that business will improve next year.
"People are more concerned at the moment about missing out on the market's next move up than suffering the next big decline," said Richard A. Dickson, a technical analyst at Hilliard Lyons in Louisville, Ky.
Despite today's buying spree, there were signs that investors are still somewhat cautious while becoming more bullish. Trading volume was lighter than normal, an indication that some players were sitting out the session.
The Dow closed up 172.92, or 1.9 percent, at 9,377.03, according to preliminary calculations. The Dow easily claimed its biggest point gain since companies began releasing third-quarter earnings in earnest last week.
The broader market also advanced. The Nasdaq composite index rose 36.78, or 2.2 percent, to 1,708.09. The Standard & Poor's 500 index gained 16.42, or 1.5 percent, to 1,089.90.
The market's gains added to the advance it has made since its sharp decline in the first week of trading following the Sept. 11 terrorist attacks. The Dow has risen 13.9 percent from its lowest close for 2001 set last month. The Nasdaq has moved up 20 percent from its low; the S&P 500, nearly 13 percent.
But analysts cautioned against reading too much into today's upturn, saying the market's gains will continue to be vulnerable until businesses and the economy show concrete signs of recovery. So far this earnings season, many companies have lowered their expectations or offered little information about future prospects.
"It's a tough market. It's not going straight up from here," said John C. Forelli, portfolio manager for the John Hancock Core Value Fund.
A key gauge of future U.S. economic activity also offered little reason for optimism today but didn't thwart the market's advance. Economic activity declined 0.5 percent last month, as the Sept. 11 terrorist attacks in New York and Washington weakened an already sagging economy, according to the New York-based Conference Board's Index of Leading Economic Indicators.
The market disregarded the decline, most likely because it met analyst expectations.
Analysts said the market also had factored in the possibility of more terror attacks and the spread of anthrax, which had been weighing on the market.
Winners included companies that beat earnings forecasts. Toymaker Hasbro advanced 86 cents to $17.67 after surpassing estimates by 5 cents a share.
Dow industrial 3M surged $5.22 to $107.39 after beating third-quarter earnings estimates by a penny a share but being cautious about the fourth quarter. The maker of Scotch tape said it expects to earn 95 cents to $1.05 a share the final three months of the year; the market expected $1.05.
USX-U.S. Steel rose $1.31 to $14.74 after reporting a loss of 22 cents a share, smaller than the 42-cent shortfall Wall Street expected. The steelmaker's advance came despite indications that business remains poor.
Advancing issues outnumbered decliners nearly 3 to 2 on the New York Stock Exchange. Volume came to 1.09 billion shares, below the 1.27 billion shares traded Friday.
The Russell 2000 index, which measures performance of smaller companies, rose 4.80 to 430.50.
