Posted on: Tuesday, October 5, 2004
Economic optimism keeps stock rally going
By Michael J. Martinez
Associated Press
NEW YORK — Wall Street extended its fourth-quarter rally into a second day yesterday, supported by falling oil prices and a bullish assessment of the economy from a Federal Reserve official.
Stocks received a boost before the session, when Philadelphia Federal Reserve president Anthony Santomero said he expects the economy to grow by 3.5 percent to 4 percent through 2005. His comments and the buying that customarily opens a new quarter gave stocks their gains — although analysts said recent economic data and the forecast for third-quarter earnings might not support the bullishness.
With the market having advanced four of the last five sessions, investors were growing optimistic about a fourth-quarter rally, and were looking past third-quarter earnings, which many expect to be disappointing. But Friday's monthly job creation report, one of the most closely watched reports on the economy, will likely shape trading for weeks to come.
"I think the third quarter earnings are already priced in, so any surprises we get out of there will be a positive for the market," said Neil Massa, equity trader at John Hancock Funds. "We also have the jobs figure on Friday, and that has the potential to be either really good for the market, or spark a major selloff."
Advancing issues outnumbered decliners by nearly 8 to 5 on the New York Stock Exchange, on volume of 1.99 billion shares, compared with 2.01 billion on Friday.
Investors were cheered by a dip in oil prices, which backed off Friday's $50-a-barrel mark. A barrel of light crude closed at $49.91, down 21 cents, on the New York Mercantile Exchange.
