NEW YORK >> Stocks extended their big rally today, defying predictions that profit- taking would diminish the previous session's triple-digit gains. Wall Street rally
goes into overdriveThe Nasdaq surges 103
By Lisa Singhania
and the Dow jumps 78 as
the rally picks up steam
Associated PressAnalysts said the strong advance, which included the Nasdaq composite index's second straight jump of more than 100 points, was a sign investor sentiment is improving -- although the Federal Reserve, among others, remains deeply concerned about the health of U.S. businesses.
"People are believers of this rally. That's the bottom line here. We're seeing big volume and big price movement in stocks," said Brian Belski, fundamental market strategist at U.S. Bancorp Piper Jaffray. "If they weren't believers, you'd be seeing a lot of selling."
The Nasdaq closed up 102.70 at 2,182.14, its third straight advance. Blue chips also did well, with the Dow Jones industrial average rising 77.88 to 10,693.71 following its 399-point gain yesterday.
The Standard & Poor's 500 index rose 15.53 to 1,253.69.
The NYSE composite index rose 2.81 to 628.83, the American Stock Exchange composite index lost 2.56 to 898.02 and the Russell 2000 index was up 5.89 at 472.40.
Advancers led decliners 8 to 7 on the New York Stock Exchange, with 1,639 up, 1,438 down and 217 unchanged. Volume was 1.7 billion shares vs. 2.2 billion yesterday.
The Treasury's 10-year note fell 1 to 97 7/8; its yield rose 13 basis points to 5.28 percent. The 30-year bond fell 1 3/4 to 94 6/32; its yield rose 13 basis points to 5.79 percent.
Technology stocks fed much of the day's gains. The long-battered sector has benefited from quarterly results that weren't as weak as expected and by indications that companies expect their business to improve later this year. IBM rose $8.20 to $114.70, an 8 percent advance, on a strong earnings report that helped compensate for losses among other, nontechnology Dow components.
Johnson & Johnson slipped $1.10 to $92.85, while Boeing dropped 67 cents to $60.63.
The Nasdaq added to yesterday's 156-point gain with stocks including Apple, which rose $2.93 to $25.72 on a better-than-expected earnings report.
Oracle had a 13 percent gain, rising $2.39 to $20.31 on an upgrade from investment firm Morgan Stanley Dean Witter.
Financials also surged, reflecting the belief the sector will benefit from lower interest rates.
"The market's beginning to buy the scenario that the interest rate cuts by the Federal Reserve are going to help," said Gregory Nie, technical analyst at First Union Securities.
We've successfully navigated earnings so far, although a lot of Wall Street's expectations had been lowered coming into this."
Microsoft, Sun Microsystems and eBay were scheduled to report earnings after the market's close today, but investors weren't nervous.
Buying accelerated late in the session. The market has been steadily improving during the past two weeks.
The Fed's decision yesterday to cut interest rates -- the fourth such move this year and the second between regularly scheduled meetings -- accelerated the market's upturn by adding to investors' confidence that the economy would turn around later this year.
Meanwhile, economists are predicting another interest rate cut is likely next month to help the ailing economy, a view underscored by comments today from the Fed's vice chairman .
Roger Ferguson, who holds the No. 2 position at the Federal Reserve Board, said in a speech in Washington, "It is too early to have a strong conviction that the economy is reaching the end of this period of quite slow growth."