honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted at 11:32 a.m., Thursday, April 21, 2005

Wall Street reverses slump

Hawai'i Stocks
Updated Market Chart

By Meg Richards
Associated Press

NEW YORK — Wall Street staged a stunning rebound today as investors snapped up shares on unexpectedly robust earnings from companies including Nokia Corp. and Motorola, sending the Dow Jones industrial average soaring more than 200 points for its best day in two years.

Bargain-minded buyers jumped back into the market a day after concerns about rising inflation eclipsed strong earnings, causing the Dow to suffer a triple-digit drop for the fourth time since last week.

"Obviously the market is oversold when you get multiple days of 100-point sell-offs. I think we're going to have a nice rally here," said Matt Kelmon, portfolio manager of the Kelmoore Strategy Funds. "I think the market got flushed out ... everybody was frightened. When everyone starts seeing the glass as half-empty, it's just panic in the streets."

The Dow surged 206.24, or 2.06 percent, to 10,218.60, reversing course after a 115-point drop yesterday, and a 374-point decline last week. It was the Dow's largest one-day gain since April 2, 2003, when the blue chips closed 215.20 points higher.

The broader gauges were also higher after steep losses. The Nasdaq rose 48.65, or 2.54 percent, to 1,962.41, its best one-day gain since Nov. 24, 2003. The Standard & Poor's 500 index gained 22.45, or 1.97 percent, to 1,159.95, its best one-day showing since March 17, 2003.

Despite the big gains today, some analysts were reluctant to declare an end to the recent slide, warning that the market has had a hard time sustaining its rallies.

"The market is still jittery," said Jay Suskind, head trader at Ryan Beck & Co. "You're seeing strong earnings numbers, there's good visibility on the corporate side, but lousy macro-economic numbers for March, and that's the big quandary."

The number of Americans filing new claims for unemployment benefits plunged by 36,000 last week, the biggest drop in more than three years. Labor Department analysts cautioned that the drop was overstated, however, because the normal seasonal adjustment process used to calculate claims was skewed by the early Easter holiday.

Separately, a closely watched index forecasting future business activity fell in March, a sign that the nation's economic growth may be slowing.

Nokia gained 6.6 percent, or $1.01, to $16.35, after reporting double-digit growth in the first quarter and raising its earlier estimate of the global mobile handset market in 2005, surprising analysts. Its rival, Motorola, also had better-than-expected earnings on a solid rise in sales; Motorola was up 6.7 percent, or $1.00, at $15.93.

The market also was encouraged by yesterday's announcement that the New York Stock Exchange plans to merge with electronic trader Archipelago Inc.