Filed at 6:22 p.m. EDT
By The Associated Press
NEW YORK (AP) -- Blue-chip stocks surged higher Friday as the prior day's
powerful rebound reassured investors that the summer's lows will hold as a
market bottom, even with a troubling economic backdrop.
The Dow Jones industrial average rose 167.61 to 7,899.52, a gain of 114.83 for
the week and just shy of this year's starting point, 7,908.25.
The rally extended Thursday's sharp turnaround, which wiped out all but 9 points
of a 274-point plunge and prevented a slide below the intraday low of 7,400
reached on Sept. 1, one day after the Dow took a 512-point tumble.
Broader stock indicators lagged the blue-chip advance again, but still posted
sizable gains as big-name technology and financial shares rallied back from a
week-long pounding.
The Nasdaq composite index rose 73.37, or 5.2 percent, to 1,492.49. The index,
which is dominated by big technology names and smaller companies, had plummeted
nearly 200 points, or about 12 percent in value, the prior four days.
''Yesterday might have seen the market at full panic stage, and the reversal,
especially in technology and financial stocks, may be very telling in that
investors think the market has become undervalued,'' said Eugene Peroni,
director of technical research at Janney Montgomery Scott in Philadelphia.
Among the big Nasdaq technology names, Dell Computer rose 4 3/8 to 52 13/16,
Intel rose 5 3/8 to 83 13/16, and Microsoft rose 5 11/16 to 96 7/8.
Likewise, the Dow drew a boost from IBM, up 3 13/16 to 127 5/16, as well as its
three financial components: American Express rose 4 5/8 to 77; J.P. Morgan rose
4 3/4 to 84 5/8; and Citigroup rose 2 15/16 to 35 7/16.
''At least over the short-run, we have established a bottom,'' said Peroni,
calling it positive that investors did not turn cautious before what for many
will be an extended weekend even though the market is open on Columbus Day.
''The fact that the market was able to rally back from steep losses in several
sessions this week was a good indication that the market was beginning to
attract some real bargain hunting.''
The Dow opened Friday's session higher, but then briefly slipped to a 65-point
loss as investors took a more defensive stance before what promises to be a busy
week of company reports on third-quarter profits.
''The profits issue is still a huge uncertainty out there, but the good news is
that the market correction was so severe as to possibly discount future
disappointment,'' said Ned Riley, chief investment officer at BankBoston.
Analysts also noted that while financial instability overseas remains a fear,
the global outlook has improved because the economic crisis is getting more
attention from world leaders.
On Thursday, finance officials from 182 nations ended a week of discussions with
the International Monetary Fund announcing that it was closer to an agreement
with Brazil on a providing financial support.
The relief package is expected to provide $30 billion or more as the IMF tries
to stop a financial contagion that has already engulfed Asia and Russia from
spreading to Latin America.
The Clinton administration had been working aggressively to line up support for
a Brazilian loan, worried that if the turmoil topples the biggest economy in
Latin America, it could spread throughout a region that accounts for nearly 20
percent of U.S. exports.
Even with its successful ''test'' of this summer's lows, the Dow is still more
than 1,400 points, or 15.4 percent, below the July 17 record of 9,337.97.
Advancing issues outnumbered decliners by a 3-to-2 margin in Friday's trading on
the New York Stock Exchange. NYSE composite volume totaled 1.037 billion shares,
down from Thursday's 1.305 billion, the third- biggest tally ever.
Among other leading indexes, the Standard & Poor's 500 rose 24.95 to 984.39, and
the NYSE composite index rose 9.50 to 486.70. The Russell 2000 index of smaller
companies rose 8.12 to 318.40, and the American Stock Exchange composite index
rose 10.98 to 574.73.
Wall Street's change of heart on Thursday helped inspire European markets.
Frankfurt's DAX index rose 2.2 percent, London's FT-SE 100 rose 2.6 percent, and
Paris' CAC-40 rose 4.5 percent.
But in Tokyo, the Nikkei stock average fell 1.1 percent, closing at its lowest
level in almost 13 years, amid concerns that this week's surge by the yen will
make it harder for Japan to recover from a severe recession. A rising yen makes
Japanese exports more expensive in other currencies. |
