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The Honolulu Advertiser

Posted at 12:10 p.m., Monday, March 4, 2002

Stocks rise sharply 2nd session in row

Hawai'i Stocks
Updated Market Chart

By Lisa Singhania
Associated Press

NEW YORK – Investors bid stocks sharply higher today in a broad rally that propelled the Dow Jones industrials up more than 200 points for the second straight session. Analysts said the market's growing belief in an impending economic recovery has finally given Wall Street a reason to rally. Blue chips and technology stocks soared, despite an earnings warning from tech bellwether Oracle

The Dow closed up 217.20, or 2.1 percent, at 10,586.06, according to preliminary calculations, its best finish since July 19, when the average was 10,610.00. The Dow has advanced 479.93 since Friday, its biggest two-session point gain since December 2000.

Broader stock indicators also advanced. The tech-focused Nasdaq composite index gained 56.19, or 3.1 percent, to 1,858.93, recouping much of its recent losses but still below where it started the year.

The Standard & Poor's 500 index advanced 22.00, or 1.9 percent, to 1,153.78, barely above its 2002 debut.

"People are buying on the expectation that the recession has ended and an economic recovery is now under way," said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. "That said, the market does not move in a straight line up. Investors' nerves will likely be tested again, but for long-term investors, there's no need to sit on the sidelines."

Indeed, the rally reflected momentum created by the barrage of good economic news last week, including strengthening manufacturing numbers and positive comments from Federal Reserve Chairman Alan Greenspan. Analysts also say Wall Street's mood is improving. Investors are looking for reasons to buy – rather than to sell, as had been in the case in previous weeks amid accounting scandals at Enron and other companies.

Among blue chips, J.P. Morgan rose $2.84 to $32.50. General Motors advanced $3.73 to $58.70.

Transportation stocks surged on better-than-expected revenue and traffic numbers from several airlines. Continental Airlines rose $2.10 to $34.80, while American Airlines' parent company, AMR Corp., climbed $1.80 to $29.05.

The Dow Jones transportation average, which tracks the broader sector, soared 152.83, or 5.3 percent, to 3,049.96.

The tech sector also benefited from Wall Street's inclination to spend. Cisco Systems rose $1.26 to $16.26, while rival Juniper Networks soared $1.90, or 19.3 percent, to $11.73.

Still, Oracle slid $2.32 to $13.67 after Merrill Lynch reduced its rating on the stock from "buy" to "neutral." The announcement followed the software maker's announcement Friday it was reducing estimates for its third-quarter results.

Wall Street appeared to shrug off news of the worst U.S. casualties in the in Afghanistan.

"We've allowed ourselves to accept the fact that is going to be a long, drawn-out affair in Afghanistan," said Larry Rice, chief investment officer at Fahnestock & Co. "So we've pushed the war to the back seat and the economy and better-than-expected economic numbers have taken the front position."

Advancing issues led decliners nearly 3 to 1 on the New York Stock Exchange. Volume came to 1.59 billion issues, compared with 1.44 billion issues Friday.