To: American Spirit who wrote (459664 ) 9/16/2003 3:50:55 PM From: Hope Praytochange Read Replies (1) | Respond to of 769667 Stocks Rise; Dow Up 82, Nasdaq Up 31 By THE ASSOCIATED PRESS Filed at 3:21 p.m. ET NEW YORK (AP) -- Stocks advanced Tuesday, building momentum after the Federal Reserve announced it was leaving interest rates unchanged at a 45-year low of 1 percent. That decision affirmed investors' belief that the economy is on the path to recovery and soothed concerns about deflation threatening the nation's growth. In late afternoon trading, the Dow Jones industrial average was up 82.04, or 0.9 percent, at 9,530.85, more than erasing Monday's loss of 22.74. The broader market was also higher. The Nasdaq composite index rose 31.01, or 1.7 percent, to 1,876.71. The Standard & Poor's 500 index advanced 10.68, or 1.1 percent, to 1,025.49. ``They said that risk is on the downside for deflation and they expect rates to stay low for a while. That is the mess for the market,'' said John P. Waterman, chief investment officer at Rittenhouse Asset Management. Analysts said the market was also encouraged by a report showing a rise in consumer prices, because that increase points to an improving economy. ``The fact is that the economy is tending to show a pattern of improvement, rather than deterioration,'' said Kevin Caron, market strategist, Ryan, Beck & Co. The pace of buying accelerated in late afternoon trading, following the Fed's announcement on rates and its assessment of the economy. Just before the Fed's news, the Dow was up about 48 and the Nasdaq was up about 21. The Fed announced in midafternoon it will hold interest rates steady, a position that some economists expect it to maintain at its next meeting Oct. 28 and for the remainder of the year. Investors were more concerned about the Fed's take on the economic recovery, rather than its action on interest rates, because the central bank was widely expected to leave rates untouched. They were hoping the Fed would say that deflation, a dangerous slide in prices, doesn't pose a threat to the economic revival. And, indeed, the Fed said low rates are ``providing important ongoing support to economic activity.'' Tuesday's other economic news -- the Labor Department's Consumer Price Index -- also matched economist's expectations and supported the notion that deflation is not a danger. Consumer prices rose by 0.3 percent in August, the biggest increase in five months, due in part to a spike in gasoline costs, the department said. The rise in consumer prices has a positive spin to it in that it backs up other data signaling that an economic recovery is under way. ``It helps build a case for an expanding economy,'' Caron said. Brokerage house upgrades also contributed to Tuesday's advance. Dow Jones & Co. Inc. rose $2.20 to $47.71 after Deutsche Securities upgraded the media company and publisher of The Wall Street Journal to ``hold'' from ``sell.'' United Parcel Service Inc. advanced $1.47 to $64.08 after Merrill Lynch & Co. Inc. upgraded it to ``buy'' from ``neutral.'' Micron Technology Inc. rose 41 cents to $13.63 after First Albany Corp. upgraded the chipmaker to ``strong buy'' from ``buy.'' Meanwhile, The Kroger Co. fell 98 cents to $17.67 after missing second-quarter earnings expectations by 7 cents a share and cutting its full-year outlook. Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange. Trading volume totaled 1 billion, up from 844.11 million at the same point Monday. The Russell 2000 index, the barometer of smaller company stocks, rose 5.94, or 1.2 percent, to 513.58. Overseas, Japan's Nikkei stock average finished Tuesday up 1.6 percent. In Europe, France's CAC-40 and German's DAX index each rose 1.4 percent, while Britain's FTSE 100 advanced 0.9 percent. ^-------- On the Net: New York Stock Exchange: nyse.com Nasdaq Stock Market: nasdaq.com