Rally pushes Dow back above 8,000
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By Amy Baldwin
Associated Press
NEW YORK — Bargain hunters took charge of Wall Street today, halting the market's protracted sell-off and giving stocks their first respectable advance in more than two weeks. The Dow Jones industrials climbed nearly 100 points.
Stocks rallied despite investors, who were waiting nervously for President Bush's State of the Union address, which was expected to deal with a possible war with Iraq and the sluggish economy.
The buying, aided by better-than expected earnings, pushed the Dow back up above the 8,000 mark after the blue chip average fell below that milestone yesterday for the first time in three months.
Analysts said the market was due for a rebound after having seen stocks fall for seven of the previous eight sessions. But they also suspected the buying would be short-lived due to investors' ongoing fears that a possible war with Iraq will undermine an already flagging economy.
The Dow closed up 99.49, or 1.3 percent, at 8,089.05, according to preliminary calculations. It was the Dow's biggest advance in more than two weeks, or since Jan. 9, when it rose 180.87.
In the previous eight sessions, the Dow dropped 853 points, more than wiping out all of its 2003 gains. Yesterday, the Dow dropped 141.45 to close below the 8,000 level for the first time in three months, or since Oct. 14, when it stood at 7,877.40.
The broader market also enjoyed a lift from bargain hunters. The Nasdaq composite index rose 17.04, or 1.3 percent, to 1,342.31. The Standard & Poor's 500 index advanced 11.07, or 1.3 percent, to 858.55.
Still, the market's gains failed to entirely wipe out yesterday's declines, much less those suffered in two weeks of selling, a sign that investors were cautious ahead of Bush's address tonight.
"It is pretty obvious that there is an interest to see what the president is going to say tonight. So, as far as the fundamentals go, like earnings, they are going to take a backseat as the Iraq issue plays itself out," said Kevin Caron, market strategist, Ryan, Beck & Co., LLC.
Investors were waiting to see what action the Federal Reserve Open Market Committee might take at its two-day meeting that began today. Analysts expected the Fed to leave interest rates unchanged but to move its bias back to one of easing rates in the future.
Investors will be looking to both Bush and the Fed for reasons to have faith in the market.
"There are too many question marks right now, and the market doesn't like uncertainty," said Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "Investors really need to see something right now that will make them feel better. There is uncertainty whether the Fed or the State of the Union will produce that."
The market managed to rally despite a lackluster report on consumers and discouraging news about durable goods orders.
The Conference Board reported that consumer confidence in January fell nearly 2 points to 79, slightly better than the 78.5 reading economists predicted.
The Commerce Department said orders to U.S. factories for big-ticket itemsrose by 0.2 percent in December, smaller than the 1 percent rise economists were expecting.
