NEW YORK >> Boosted by some healthier-than-expected earnings reports, Wall Street surged higher today, carrying the Dow Jones industrials and other market indexes to levels not seen since the Sept. 11 terrorist attacks.
Stocks surge to
near pre-attack levels
By Lisa Singhania
The Dow was about 220 points below its close of Sept. 10, having fallen 1,369 points after the attacks. The Nasdaq composite and Standard & Poor's 500 indexes traded within points of their closes of a month ago.
Analysts again cautioned that the advance, which followed another spurt higher Wednesday, should not be read as a fundamental market recovery or a sign that investors are no longer worried about fallout from the terrorist attacks or U.S. retaliation.
"The passage of time has healed some of the wounds ... and investors are feeling a little better," said Matt Brown, head of equity management at Wilmington Trust. "This is a rebound, though.
"I think the market is still going to be pretty reactive to both good and bad news. If there were further developments domestically on the terrorism front, that would be very negative for the market."
In afternoon trading on Wall Street, the Dow Jones industrial average was up 147.03 at 9,387.89, extending a 188-point rally yesterday. The blue chips have now gained back more than 1,170 of the 1,369 points lost in the selloff that followed the attacks.
Broader stock indicators were also sharply higher today. The S&P 500 rose 12.35 to 1,093.34, having regained the 126 points it lost after the attacks, and the Nasdaq composite index was up 59.10 at 1,685.36, making back nearly all of the 272 it lost.
Advancing issues led decliners more than 3 to 2 on the New York Stock Exchange.
The Russell 2000 index rose 9.16 to 430.82.
The price of the Treasury's 10-year note was down 15/32 point, or $4.69 per $1,000 in face value, while its yield rose to 4.65 percent from 4.59 percent late yesterday. Prices and yields move in opposite directions. The 30-year bonds were down 19/32 point and yielded 5.39 percent, up from 5.36 percent late yesterday.
Yields on one-month Treasury bills rose to 2.30 percent as the discount rose 0.02 percentage point from the weekly auction to 2.27 percent. Yields on three-month Treasury bills rose to 2.24 percent as the discount rose 0.03 percentage point to 2.21 percent. Six-month yields rose to 2.22 percent as the discount rose 0.02 percentage point to 2.18 percent.
Prices on two-year Treasury notes were down 1/8 point and yielded 2.83 percent, up from 2.75 percent late yesterday.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
On Sept. 10, the last day of trading before the attacks, the Dow closed at 9,605.51, while the S&P 500 was at 1,092.54. The Nasdaq closed that day at 1,695.38.
Better-than-expected earnings news from Genentech and ETrade cheered investors who have been bracing themselves for dismal results as U.S. companies issue their third-quarter reports this month.
Investors bid biotech company Genentech up $3.71 to $44.51 after the company exceeded third-quarter expectations. E-broker ETrade also turned in a better performance than Wall Street had anticipated, sending its stock up $1.02 to $7.68.
General Electric gained $1.17 to $39.08 on third-quarter results that met expectations. And Yahoo gained $1.66 to $12.59 in trading after meeting analysts' third-quarter projections but slightly reducing its forecast for the current quarter.
Analysts were less enthused, noting that stocks are still rebounding from the precipitous drop that followed the terrorist attacks. They also said political and economic uncertainty remains considerable. Indeed, the indexes' margin of gain fluctuated throughout the session today on light profit-taking, although stocks maintained their upward momentum.
"The fact that a company like GE was able to meet toned-down expectations is again the lack of a negative being a positive for the market," said Charles G. Crane, strategist at Victory SBSF Capital Management.
"The sense I have is that we could retest the September lows before the end of the year or we could do it within next four or five trading sessions. We really don't know."
Tech stocks were broadly higher, translating into a 10 percent gain on the Philadelphia Semiconductor Index, which rose 44.11 to 472.70. Strong performance by the sector is considered a sign that an economic recovery could be beginning, but there have been false starts before and stock prices in the sector have fallen considerably. Ciena rose $2.22 to $14.70.
Pharmaceutical stocks, in turn, fell as investors cashed in gains in a sector that has done well recently as Wall Street searched for less risky investments. Johnson & Johnson dropped $1.69 to $54.35.
Investors appeared unfazed by data showing unemployment remains a problem for the economy.
The Labor Department reported that for the week ending Oct. 6, new jobless claims fell by a seasonally adjusted 67,000 to 468,000, a level suggesting a very weak job market.
The more stable four-week moving average rose last week to 463,000, the highest level since Dec. 14, 1991, when the country was in its last recession.
The worst September retail sales in two decades also failed to stop the broader market's advance, chiefly because the disappointing results weren't surprising given consumers' anxieties after the Sept. 11 attacks.
Gap rose 10 cents to $13.68, despite reporting a 17 percent drop in sales at stores open at least a year.
Overseas, Japan's Nikkei stock average rose 3.8 percent. In Europe, Germany's DAX index was up 1.4 percent, Britain's FT-SE 100 was up 0.2 percent, and France's CAC-40 was up 0.3 percent.