NEW YORK >> Upbeat investors sent stock prices sharply higher today on news that the economy was stronger than expected in the first quarter. Dow surges, goes
positive for the yearBy Amy Baldwin
Associated PressBlue chips benefited the most as the Dow Jones industrial average moved into positive territory for the year by 0.22 of a percentage point in ending its third straight week of triple-digit gains.
"The stock market is relieved that the world is not coming to an end," said Peter Canelo, U.S. investment strategist for Morgan Stanley Dean Witter.
The Dow gained 117.70 to close at 10,810.05 and end the week up 230.20. The Nasdaq composite index rose 40.80 to 2,075.68 and the Standard & Poor's 500 index climbed 18.53 to 1,253.05.
The Nasdaq is now up 23.3 percent from its low close for the year of 1,683.80, reached April 4.
Advancers outnumbered decliners nearly 2 to 1 on the New York Stock Exchange, with 2,011 up, 1,030 down and 225 unchanged. Volume was 1.3 billion shares vs. 1.5 billion yesterday. The NYSE composite index rose 8.28 to 637.64, the American Stock Exchange composite index gained 10.72 to 948.85 and the Russell 2000 index rose 6.41 to 483.97.
The Treasury's 10-year note fell 31/32 to 97-18/32; its yield rose 13 basis points to 5.32 percent. The 30-year bond plunged 17/32 to 93-31/32; its yield rose 9 basis points to 5.80 percent.
Analysts said the market was responding to the Commerce Department's report of a 2 percent rise in the nation's gross domestic product. The increase, at least double what many analysts were expecting, showed growth in consumer spending and housing construction as well as a needed drop in inventories.
"The economy is healthier than many observers believed," said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. "That shows that the medicine -- the interest-rate cuts that the Fed has made -- have started to take effect."
The strides the economy made in the first quarter bode well for the rest of the year, Canelo said.
"It's not going to be as bad as people thought," he said.
Federal Reserve Chairman Alan Greenspan also offered the market some hope, saying in a speech that productivity gains are likely to continue because of the technological revolution in the work place.