NEW YORK >> The flight of Taliban forces from Afghanistan's capital today gave investors a surge of optimism and sent stocks climbing sharply.
Markets up sharply
on positive war news
By Adam Geller
Relief that yesterday's jetliner crash in New York appeared to be an accident and not the result of terrorism added to the market's upbeat mood.
The news developments boosted the confidence of investors, with a growing number buying on the belief that the market has reached bottom, analysts said.
"If you miss the first month of a bull market you leave a lot of performance on the table. That's what I think you're seeing. People are acknowledging that this bottom might be for real," said Mitch Stapley, chief fixed income officer at Fifth Third Bank in Grand Rapids, Mich. "They're afraid of being left behind."
The Dow Jones industrial average closed up 196.58 at 9,750.95, according to preliminary calculations, a sharp contrast with the plunge it took in the hours after yesterday's plane crash.
Broader stock indicators also closed higher. The Nasdaq composite index closed up 51.98 at 1,892.11, and the Standard & Poor's 500 index was up 20.76 at 1,139.09.
Advancing issues outnumbered decliners by a 7 to 3 margin on the New York Stock Exchange, with 2,219 rising, 936 falling and 201 unchanged. Volume came to 1.33 billion shares, up from 991.3 million shares the previous day.
The Russell 2000 index, which tracks smaller company stocks, rose 7.24 to 447.72. The NYSE composite index climbed 9.19 to 578.31.
The American Stock Exchange composite index rose 4.72 to 829.46.
The price for the U.S. Treasury's 10-year note fell 20/32 to 10 28/32 while its yield rose 8 basis points to 4.378. The price for the 30-year note fell 21/32 to 107 2/32; its yield rose 4 basis points to 4.916. The price for the 2-year note fell 6/32 to 100 15/32 with a yield up 10 basis points to 2.503.
Analysts said the market -- which has rebounded to pre-Sept. 11 levels in recent weeks -- was encouraged by what it saw as signs of progress in the fighting in Afghanistan. Opposition forces arrived in the capital, Kabul, and Taliban troops left, possibly heading for the mountains to continue their fight.
"We've been talking in the past couple of weeks about 10,000 and 2,000," as targets for the Dow and the Nasdaq, said Scott Bleier, chief investment strategist at Prime Charter Ltd. in New York. "We've been thinking about that for the end of the year, but the way things are going we may get there before that. I think things going well in Afghanistan helps the psychological picture."
Investors also took note of the investigation into Monday's American Airlines jet crash in New York. Authorities said it appeared so far to be an accident, although they did not rule out sabotage.
The optimism fueled strong buying in technology stocks despite a statement late Monday from Oracle CEO Larry Ellison that his company's earnings in the current quarter will likely fall short of expectations.
Oracle's stock fell 88 cents to $14.52.
But investors found good news in Texas Instruments, which filed paperwork with the Securities and Exchange Commission saying that the third quarter will mark the low point for semiconductor orders and that it expects to meet fourth-quarter expectations.
Texas Instruments rose $1.92 to $33.82.
"There's a short-term ignorance of any concern in earnings," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum in New York. "It's as if, hey, we know the bad news story but we're looking to 2002 and right now, regardless of what's being said, this market is looking forward, not at the current situation. That's the story in technology."
Other gainers included Home Depot, which rose $2.88 to $44 after reporting third quarter earnings that met analysts' forecasts.
AMR, parent of American Airlines, saw its shares rise 63 cents to $17.12.
General Motors shares rose $2.60 to $44.99 after the automaker named Robert Lutz chairman of its industry-leading North American operations.
Losers included Watson Pharmaceuticals, which fell $18.61 to $28.54 after announcing it sustained a loss in the third quarter, facing stiff competition from other generic drug makers.
Wal-Mart, which reported earnings that met expectations, nevertheless saw its shares fall 58 cents to $55.
Overseas, Japan's Nikkei stock average fell 0.5 percent. Germany's DAX index was up 2.6 percent, Britain's FT-SE 100 was up 2.5 percent, and France's CAC-40 was up 4.3 percent.