Stocks gain steam
after slow start

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By Eileen Alt Powell
Associated Press

NEW YORK >> Stocks turned higher today as investors, digesting some conflicting economic data, felt more secure about placing bets on Wall Street.

After declining through most of the morning, the Dow Jones industrial average changed direction at midday and closed up 78.47 at 10,990.41. The turnaround was helped by an announcement by AT&T, a Dow component, that it was raising basic residential calling rates, effective July 1.

Technology shares rose for a second day, pushing the Nasdaq composite index up 38.95 to 2,149.44. The Standard & Poor's 500 index was up 4.85 at 1,260.67. The NYSE composite index rose 1.14 to 642.81, the American Stock Exchange composite index gained 5.60 to 945.23 and the Russell 2000 index was up 5.22 at 501.72.

Advancers led decliners 7 to 5 on the New York Stock Exchange, with 1,805 up, 1,245 down and 220 unchanged. Volume was 1 billion shares vs. 1.1 billion yesterday. The Treasury's 10-year note rose 3/32 to 97 1/4; its yield fell 1 basis point to 5.34 percent. The 30-year bond gained 21/32 to 95 10/32; its yield fell 5 basis points to 5.70 percent.

Alfred E. Goldman, director of market analysis at A.G. Edwards & Sons Inc. in St. Louis, said investors were heartened when the National Association of Purchasing Management's report of continued weakness in manufacturing didn't pull the market down sharply. "The money on the sidelines said, 'Whoops. I'd better start buying before the boat has left the dock,' " Goldman said. The market, he added, "is acting as if it worked off short-term excesses and is ready to move up."

Shortly after the market opened, the purchasing managers group reported its index of business activity fell to 42.1 in May from 43.2 in April. It was the 10th consecutive monthly decline in the manufacturing sector and a lower reading than analysts expected.

The Labor Department, meanwhile, said the nation's unemployment rate dipped slightly to 4.4 percent in May. The unemployment rate in April was 4.5 percent, the highest in 212 years. Most analysts had been expecting the jobless rate to rise to 4.6 percent. But the report indicated manufacturing companies shed 124,000 jobs last month -- the largest payroll reduction so far in that sector, which has lost almost half a million jobs this year.

"There are a lot of cross currents in the market," said Eugene G. Mintz, analyst at Brown Brothers Harriman & Co. in New York.