Stock Prices Rise on Optimism
Dow Reclaims 9,000 Level for 1st Time in 2 Weeks As Investors Send Stocks Higher Over Bush Economic Plan
By AMY BALDWIN
Wednesday October 3, 3:26 pm Eastern Time
NEW YORK (AP) -- The Dow Jones industrials reclaimed the 9,000 level for the first time in two weeks Wednesday as investors, heartened by President Bush's push for an economic stimulus plan, sent stocks barrelling higher.
The market had waffled in early trading but rose decisively, up 170 by late afternoon, as Bush in televised remarks in New York urged Congress to approve the plan. It includes tax cuts for individuals and business and is worth $60 billion and $75 billion.
Technology stocks also moved higher after Cisco Systems chief executive John Chambers affirmed the company's outlook. The upturn on Wall Street added to a rally triggered Tuesday by the ninth interest rate cut so far this year.
``People are believing that between fiscal and monetary policy, the economy will stabilize,'' said Arthur Hogan, chief market analyst at Jefferies & Co.
In late afternoon trading, the Dow surged 170.98 to 9,121.57, having risen 113 Tuesday after the Federal Reserve cut rates by half a percentage point.
Wednesday was the first time the Dow has broken the 9,000 level since Sept. 18; it hasn't closed above 9,000 since the Sept. 11 terrorist attacks. The blue chips have regained nearly 900, or 65 percent, of the 1,369 points they tumbled in the first week of trading after the attacks.
The broader market was also significantly higher as the Nasdaq composite index rose 101.75, or 6.8 percent, to 1,594.08 and the Standard & Poor's 500 index advanced 22.75 to 1,074.08.
The Nasdaq was positioning itself for its biggest gain win since the assaults, surpassing the 76 it picked up Sept. 24.
Wednesday's advance was a big switch for the market, which has struggled amid the business fallout, namely thousands of layoffs and a series of profit warnings, that has followed the attacks.
``Three weeks after the greatest shock in our collective lives, there is a tremendous realization that the world is not going to come to an end,'' said Scott Bleier, chief investment strategist for Prime Charter Ltd.
Bleier attributed the upturn to lower interest rates, the possible economic stimulus plan and steeply discounted stock prices.
Among Wall Street's winners were companies that stood by earnings forecasts. Cisco rose nearly 24 percent, up $2.75 at $14.23, after CEO Chambers backed the networker's earnings forecast for the fiscal first quarter, despite a disruption in orders following the terrorist attacks.
Cisco's midafternoon news boosted the tech sector where Microsoft climbed $3.50 to $56.55 and Intel rose $1.94 to $21.46.
Upscale housewares retailer Williams-Sonoma (NYSE:WSM - news) rose $4.94, or 22 percent, to $27.14 after affirming third-quarter profit estimates.
Stocks rose across an array of sectors, indicating how optimistic investors were feeling about an economic recovery.
Boeing rose $2.30 to $36.55, Citigroup gained $1.60 to $43.85, and Wal-Mart advanced $1.09 to $53.09.
On the downside were companies that acknowledged business is slowing. Citing poor sales of its drug Prozac, Lilly lowered its earnings estimates for 2001 and 2001, and its shares fell $4.12, or nearly 5 percent, to $78.75.
Advancing issues outnumbered decliners 2 to 1 on the New York Stock Exchange. Volume was 1.31 billion shares, well ahead of the 945.48 million that were traded at the same point Tuesday.
The Russell 2000 index, which measures the performance of smaller company stocks, rose 11.88 to 413.67. |
