Posted on: Thursday, October 25, 2001

Stronger earnings help push up stocks

Associated Press

NEW YORK — Buyers swooped back into the stock market late in today's session, reversing a sharp decline as the passage of anti-terrorist legislation and a government stimulus package raised hopes for an economic recovery.

The late turnaround began in semiconductor shares and the energy sector, where a strong earnings report from Williams Cos. triggered a rally, but the buying soon spread to other areas of the market.

According to preliminary calculations, the Dow Jones industrial average closed up 117.28 at 9,462.90, erasing an earlier deficit of 167 points. The Nasdaq composite index rose 43.93 at 1,775.47 and the Standard & Poor's 500 index was up 14.89 at 1,100.09.

Prices had already started to recover by midafternoon when news came that the Senate had approved a package of anti-terrorism laws by a vote of 98-1. The bill, which Bush is expected to sign into law soon, gives police new and expanded powers to track suspected terrorists.

That news combined with the passage late yesterday in the House of a $100 billion economic stimulus package led to a turnaround in investor sentiment, which had soured in the morning following the release of several poor economic indicators.

"This is the best kind of rally," said Larry Wachtel, a market analyst at Prudential Securities in New York. "The fact that the economy came to a screeching halt because of the attacks did not come as a big surprise. The stock market has come around to the view that all that steam that was already in the boiler should bring around a recovery by spring of next year."

Even in the morning, some sectors were holding their own despite the poor economic readings on durable goods orders, unemployment, and existing home sales.

Energy shares headed higher after The Williams Cos. surpassed analysts' estimates for the third quarter and raised its forecasts for full-year earnings for 2001 and 2002. Williams' shares were up $1.70 to $27.60.