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Posted at 11:23 a.m., Thursday, June 5, 2003

Stocks make limited gains to sustain rally

Hawai'i Stocks
Updated Market Chart

By Adam Geller
Associated Press

NEW YORK ­ Investors set aside disappointing employment data and lackluster retails sales reports today, limiting their profit-taking in a market that eked out incremental gains and kept stocks at their highest levels in months.

The gains, albeit small, sustained a rally that drove the Dow Jones industrial average yesterday to its first close above 9,000 in nearly 10 months. The Dow finished virtually even today but the number of advancing issues significantly outnumbered decliners.

The Dow closed up 2.32, essentially unchanged, at 9,041.30, according to preliminary calculations. That followed a rise of more than 100 points yesterday, when it closed above 9,000 for the first time since Aug. 22.

The broader market also finished higher. The Nasdaq composite gained 11.36, or 0.7 percent, to 1,646.01. The Nasdaq is trading at levels not seen since May 2002.

The Standard & Poor's 500 index was up 3.90, or 0.4 percent, to 990.14. The S&P is at levels not seen since July.

At the end of today's trading, the Dow had risen 20.2 percent, the Nasdaq had gained 29.5 percent and the S&P had climbed 23.1 percent since March 11.

Analysts said that despite the limited nature of today's gains, the fact that there was not a broader sell-off indicates a growing sentiment by investors that the market is rebounding.

"We've been in a long and deep bear market and investors feel like the worst is over, and what appeals to them more than anything is some of the stocks that have gotten hit the worst," said Richard E. Cripps, chief market strategist for Legg Mason of Baltimore.

Investors have been encouraged by better-than-expected first-quarter earnings, signs of economic improvements and upbeat assessments of the economy by Federal Reserve Chairman Alan Greenspan.

"People are anticipating that the economy is going to continue to grow ­ slowly, but nonetheless we are coming up from a very depressed level," said Richard A. Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla.

Even so, investors remain cautious ahead of the government's release tomorrow of May jobless figures.

"You have to see strong numbers for us to be convinced that the economy is in a true comeback and not just going up on air," said Stephen Carl, principal and head of equity trading at The Williams Capital Group.

Today, disappointing employment data and lackluster retail sales for May prompted some investors to sell stock and lock in profits.

The Labor Department reported today that the number of American workers filing new claims for jobless benefits climbed to a five-week high last week, indicating that companies are still contending with an economy that is struggling for footing.

New applications for unemployment insurance rose by a seasonally adjusted 16,000 to 442,000 for the work week ending May 31, putting claims at their highest level since the week ending April 26. The rise surprised economists, who were predicting claims would fall to 421,000.

Major retailers reported today that same-store sales, those at stores open at least a year, rose modestly in May. But rainy weather in certain regions and a weak job market limited spending for yet another month.