NEW YORK >> Another wave of optimism swept over Wall Street today, carrying stocks higher and lifting the Dow Jones industrials to their highest level in nearly three months. Dow rockets 163
to hit 3-month highThe blue chips near 10,900
By Lisa Singhania
while the Nasdaq chalks up
its third straight advance
Associated PressMarket watchers said the market's advance, which gained momentum during the afternoon, reflected growing sentiment that the worst is over and that the Federal Reserve will cut rates for a fifth time this year when it meets May 15.
"There's a general feeling that the market has begun to act much better ... and it's a little safer to do some buying," said Todd Clark, co-head of listed trading at WR Hambrecht. "But I'm hard pressed to find any news or earnings to explain these gains."
The Dow Jones industrial average closed up 163.37 at 10,898.34, or 1.5 percent, and jumped back into positive terriorty for the year. It was the blue chip index's highest close since Feb. 13, when it reached 10,903.32.
Broader stock indicators also were higher. The Nasdaq composite index climbed 52.01 to 2,168.25, nearly 2.5 percent, adding to a two-day winning streak. The Standard & Poor's 500 index was up 16.98, or 1.4 percent, at 1,266.44.
The Dow is now up 1.03 percent for the year while the S&P 500 is down 4.08 percent and the Nasdaq is off 12.24 percent.
Trading volume was light today. Advancers led decliners 8 to 7 on the New York Stock Exchange, with 1,888 up, 1,177 down and 215 unchanged. Volume was 1.3 billion shares vs. 1.4 billion yesterday.
The NYSE composite index rose 6.21 to 641.04, the American Stock Exchange composite index fell 7.33 to 944.45 and the Russell 2000 index rose 5.14 to 490.46.
The Treasury's 10-year note rose 12/32 to 97 26/32; its yield fell 5 basis points to 5.29 percent. The 30-year bond rose 21/32 to 94 26/32; its yield fell 5 basis points to 5.74 percent.
The rally appeared to be the latest extension of the momentum that began in early April on Wall Street. Convinced that stock prices will start to recover by early 2002, many institutional and individual investors have gradually been coming back into the market.
Most spectacularly, the battered Nasdaq has risen more than 32 percent from its closing low for the year, 1,638.80, reached less than a month ago on April 4.
Although the market has had some down days, for the most part it has kept its gains -- an encouraging sign to many analysts.
The release of mixed economic data today added to Wall Street's enthusiasm and hopes for a May interest rate cut from the Fed. The Commerce Department said construction spending rose more than expected in March, the fifth straight monthly increase. The National Association of Purchasing Management reported manufacturing activity declined for the ninth consecutive month in April.
Gains by airplane manufacturer Boeing and consumer products maker Procter & Gamble led the Dow higher. Boeing rose $2.13 to $63.93, while P&G was up $4.13 at $64.18 on a better-than-expected earnings report.
Technology stocks also advanced, recovering from a sluggish start earlier in the session. Cisco Systems rose 82 cents to $17.80 and Microsoft, a Dow component, advanced $2.43 to $70.18. Online travel agent Expedia rose $4.11 to $30.12, a nearly 16 percent gain, after announcing it had reached profitability.
But some investors today sold stocks to lock in their profits. Oracle fell 19 cents to $15.97.
And there were a few other disappointments: Ford Motor dropped $1.18 to $28.30 on a steeper-than-expected slide in April auto sales.
"The market made a very strong advance in April, so I think some of the selling and consolidation we're seeing is normal," said Will Braman, chief investment officer at John Hancock Funds.