Posted at 11:05 a.m., Friday, September 28, 2001

Stock market rebounds in strong showing

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Associated Press

NEW YORK — Stocks soared today to give Wall Street a solid one-week rebound from the losses that followed the terrorist attacks on the World Trade Center and the Pentagon.

The Dow Jones industrials index regained nearly half the 1,369 points it lost last week as trading resumed after the attacks. The Dow also recorded its second-biggest weekly point gain ever as investors bet on bargain stocks.

The Dow closed up 165.79 at 8,847.21, according to preliminary calculations. It rose 611.40, or 7 percent, for the week — second only to the 666.41 gain during the week ending March 17, 2000.

Broader measures also rose. The Nasdaq composite index was up 38.06 at 1,498.77 for a gain of 5.3 percent or 75.57 for the week. The Standard & Poor's 500 index rose 22.33 to the 1,040.94, finishing the week up 75.14 or 7.8 percent.

"You had this huge loss last week on a lot of fear and concern, and prices became depressed," said Ralph Acampora, director of technical research at Prudential Securities. "We call that an oversold market and at some point you get a relief rally and that's what this is — a nice, technical bounce."

Analysts said the market is trying to right itself after the shock of the attacks. But they cautioned against any assumption that the market won't test its most recent lows again, noting the extent of the economic fallout from the tragedies and any U.S. military response remains unknown.

"It's very much of a psychological battle in investing right now," said John Forelli, portfolio manager for John Hancock Core Value Fund. "We don't know if there's going to be more terrorist attacks and, if companies do fall short of expectations when they start reporting earnings, stocks will still go down."

The gains came on the last trading day of the third quarter. Such days can be volatile as fund managers adjust their portfolios but today the market moved consistently higher.

Financial stocks soared, lifted by gains in American Express and Citigroup. Even Bank of New York was higher, despite warning that it will miss third-quarter earnings targets because of the attacks.

Tech and retail stocks also showed some strength.

Also Friday, the Commerce Department reported the U.S. economy grew at a rate of 0.3 percent growth rate in the April-June quarter, higher than the 0.2 percent previously reported.

Investors had little reaction because the report concerned this past spring, rather than the present. It also was expected given the bad economic and corporate news the market has been hearing for months.