NEW YORK >> Stocks surged Friday, as investors shrugged off worries about a war with Iraq and drew some optimism from Federal Reserve Chairman Alan Greenspan's latest assessment of the economy. The three main indexes posted a weekly gain to snap a two-week losing streak. Greenspan talk lifts stocks
By Hope Yen
Associated PressAnalysts said many investors were looking to pick up bargains after three days of declines. News that financial brokerages had reached a settlement on conflict-of-interest charges and that Senate Republican leader Trent Lott resigned his leadership post added to the good mood.
"The fewer of those types of things people have to worry about, the more people can focus on the fact that the economic news is not all that bad and the prospects for the stock market in 2003 are pretty good," said Scott Wren, equity strategist for A.G. Edwards & Sons.
Advancing issues outnumbered decliners 2 to 1 on the New York Stock Exchange.
The Dow Jones industrial average climbed 147.21, or 1.8 percent, to close at 8,512.01. In the previous three sessions, blue chips fell 262 points to their lowest level in nearly six weeks.
The broader market also finished higher. The Nasdaq composite index rose 9.52, or 0.7 percent, to 1,363.62. The Standard & Poor's 500 index gained 11.57, or 1.3 percent, to 895.82. The Russell 2000 index rose 3.47, or 0.9 percent, to 386.88.
The price of the Treasury's 10-year note was down 1/8 point, while its yield rose to 3.96 percent from 3.94 percent yesterday. Two-year Treasury notes were down 1/32 point and yielded 1.72 percent, up from 1.70 percent yesterday.
The Commerce Department reported today that the U.S. economy posted a solid growth rate of 4 percent in third quarter, unchanged from the estimate made a month ago, even as worries persist about just how much the economy is weakening.
And 10 of the nation's largest brokerages, including Citigroup and Goldman Sachs, agreed to pay about $1.4 billion to resolve conflict-of-interest allegations in one of the largest settlements ever with securities regulators.
That helped lift financial sector stocks, with Citigroup rising $1.14 to $38.14 and Morgan Stanley jumping $1.74 to $42.04.
News of Lott's resignation helped boost stocks today. Lott said he would step down as majority leader, but remain as a senator.
Analysts said investors believed the departure of Lott, who has been criticized for racially insensitive comments, will allow the Republican-controlled Congress to move forward on business-friendly initiatives such as tax cuts.
"The guy had become a liability to the Republican party, and therefore the president's agenda," Wren said. "They need to focus on an economic stimulus."
Trading was brisk as Wall Street worked through its first quadruple-witching session, the quarterly expiration of index futures and options as well as individual stock futures and options.
Overseas, Japan's Nikkei stock average finished 0.2 percent higher. In Europe, France's CAC-40 climbed 0.9 percent, Britain's FTSE 100 rose 1.3 percent and Germany's DAX index gained 2.1 percent.
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