Encouraging reports trigger a broad rally
• Hawai'i Stocks
• Updated Market Chart
By Hope Yen
Associated Press
NEW YORK — A pair of encouraging economic reports — one on consumer confidence, the other on home sales — gave Wall Street a shot of adrenaline today, sending the Nasdaq composite to its best level in nearly a year.
The Dow Jones industrials also soared, moving up nearly 180 points.
"Housing sales were pretty good and consumer confidence was a decent number. People saw that as a positive and decided, 'Let's pick up some bargains,' after last week's declines," said Todd Leone, managing director of equity trading at SG Cowen Securities.
Trading was moderate following the long holiday weekend. U.S. markets were closed yesterday for Memorial Day.
The Nasdaq climbed 46.60, or 3.1 percent, to close at 1,556.69, following a weekly loss of 1.9 percent to end a five-week winning streak. That was the highest level seen since June 5, 2002, when the tech-focused index closed at 1,595.26.
The Standard & Poor's 500 index advanced 18.26, or 2 percent, to 951.48, having dropped 1.2 percent last week to also end five weeks of gains. It was the highest level since Aug. 22, 2002, when the index closed at 962.70.
And the Dow rose 179.97, or 2.1 percent, to 8,781.35, having fallen 0.9 percent last week to snap a three-week winning streak. That was the best seen since Jan. 14, when the blue chips finished at 8,842.62.
The Conference Board reported today its consumer confidence index rose to 83.8 in May from 81 in the previous month as consumers grew modestly confident about the economy. Analysts had projected 84.
Meanwhile, the Commerce Department reported new home sales gained 1.7 percent from March to April to a seasonally adjusted annual rate of 1.03 million. That marked the best showing since December.
The reports helped overcome investor jitters after the euro briefly hit a record high against the dollar today. The Dow fell as much as 60 points in early trading on fears that a weak dollar will deter foreign stock investment before rebounding.
After several weeks of market rallies on upbeat earnings, many investors are looking for more concrete signs of an economic recovery. Analysts say today's reports offered some of that evidence, although they added that trading will still likely be choppy and confined to a range until investors see more positive data.
"This isn't going to be a daily event," said Hugh Johnson, chief investment officer at First Albany Corp., referring to today's market gains. "The problem is valuation. We have come very far very fast. It's ahead of itself, and it's time for a breather."
Gainers included biotech companies Genentech, which advanced $2.92 to $63.85, and Biogen, which rose $2.38 to $42.88.
ImClone Systems surged $4.75 to $24.60 after the company said it received a $6 million milestone payment from Merck KGaA for its cancer drug Erbitux.
Tenet Healthcare jumped 59 cents to $16.14 after CEO Jeffrey Barbakow said he would resign. The hospital chain's Medicare payments are under investigation.
Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange. Volume came to 1.51 billion shares, up from 1.20 billion traded Friday.
