Stocks remain strong as investors gain confidence
• Hawai'i Stocks
• Updated Market Chart
By Hope Yen
Associated Press
NEW YORK — Wall Street extended its buying momentum into a fourth day today as investors grew more optimistic that the economic recovery is firmly on track. Brokerage upgrades of General Electric Co. and Siebel Systems Inc. added to the good mood.
The Dow Jones industrials reached another 14-month high, while the Nasdaq composite and Standard & Poor's 500 index remained at their highest levels in more than a year.
"People are back to work and they have some cash on the sidelines that they want to put to work," said John C. Forelli, portfolio manager for Independence Investment LLC. "In the short run, this is a market that wants to go up."
The Dow closed up 45.19, or 0.5 percent, at 9,568.46, having gained 107 points in the previous session. Today's close was the highest level since June 18, 2002, when the blue-chip average stood at 9,706.12.
The broader market also finished higher. The Nasdaq climbed 11.42, or 0.6 percent, to 1,852.90, having jumped 31 points yesterday to its highest close since April 1, 2002.
The S&P 500 rose 4.28, or 0.4 percent, to 1,026.27, after gaining nearly 14 points in the previous session to its best finish since June 18, 2002.
GE gained 68 cents to $31.12 after J.P. Morgan Chase & Co. upgraded the companyâs stock rating to "neutral" from "underweight."
Siebel Systems climbed 50 cents to $11.01 after Credit Suisse First Boston raised the tech company's stock rating to "outperform" from "neutral."
A report on construction spending also cheered investors. The Commerce Department said spending increased in July to a seasonally adjusted rate of $879.8 billion. While the 0.2 percent increase from the previous month wasn't as large as analysts' predictions, the pace was still the highest since January.
Upbeat investors, meanwhile, shrugged off New York Attorney General Eliot Spitzer's announcement of a $40 million settlement with a hedge fund which allegedly engaged in illegal trading schemes with several mutual-fund firms. A probe into the extent of these practices in the mutual fund industry is continuing.
Stocks have surged since mid-March on investor expectations of a strong economic recovery by year's end. But some analysts believe the market is due for some pullbacks after climbing so quickly, particularly now that stocks have reached their highest levels in more than a year.
H.J. Heinz Co. rose 47 cents to $33.46 after the foodmaker reported quarterly operating earnings that met analysts' expectations.
AdvancePCS Inc. jumped $7.45, or 18.6 percent, to $47.45 after Caremark RX Inc. said it would acquire the pharmacy benefit manager in a deal valued at about $6 billion. But Caremark declined $2.10, or 8.3 percent, to $23.30.
Advancing issues outnumbered decliners about 9 to 5 on the New York Stock Exchange. Volume was heavy.
The Russell 2000 index, a barometer of smaller company stocks, rose 3.21, or 0.6 percent, to 510.71.
Overseas, Japan's Nikkei stock average finished 0.2 percent higher Wednesday. In Europe, France's CAC-40 rose 1.8 percent, Britain's FTSE 100 gained 1.4 percent and Germany's DAX index climbed 2.3 percent.
