Economic recovery hopes
lift Dow again

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By Amy Baldwin
Associated Press

NEW YORK >> Betting that the economy won't get much worse and that business will indeed improve next year, investors pushed the stock market mostly higher today for a second straight day. In focusing on the future, the market set aside its disappointment over a surge in unemployment.

Analysts said investors for the most part shrugged off the jobless report because they believe the economy will turn around in 2002 thanks to this year's nine interest rate cuts and the possibility of a tax cut package being pushed by President Bush. The market, which also looked past yesterday's reports of big drops in consumer spending and manufacturing activity, is also increasingly hopeful about the government's retaliation for the Sept. 11 terrorist attacks.

"There's a whole bullish case revolving around the notion that we will be successful in degrading the terror threat, and our economy can expand again, and that 2002 will be better than 2001," said Joseph V. Battipaglia, chief investment strategist at Gruntal & Co.

The Dow Jones industrial average closed up 59.64, or 0.6 percent, at 9,323.54. The blue chips, which recovered from an earlier 54-point loss, added to their 188-point surge from yesterday.

But the broader market finished narrowly mixed. The Nasdaq composite index slipped 0.57, or 0.03 percent, to 1,745.73, while the Standard & Poor's 500 index gained 3.10, or 0.3 percent, to 1,087.20.

Advancers narrowly outnumbered decliners 16 to 15 on the New York Stock Exchange, with 1,574 up, 1,512 down and 234 unchanged. Volume was 1.11 billion shares vs. 1.31 billion shares traded yesterday.

The NYSE composite index rose 1.64 to 557.60, the American Stock Exchange composite index fell 4.41 to 824.20 and the Russell 2000 index fell 1.81 to 433.07.

The Treasury's 30-year bond fell 2 1532 to 106 1532, with its yield rising 15 basis points to 4.95 percent, following two straight days of big gains following the Treasury Department decision to discontinue offering the securities.

The 2-year note was unchanged at 100 1732; its yield fell 1 basis point to 2.47 percent. The 10-year note fell 3132 to 105 232; its yield rose 12 basis points to 4.36 percent.

News that the nation's unemployment rate soared to 5.4 percent in October, a 0.5 percent rise over September, pushed the entire market lower early today. Investors later resumed buying, and analysts said they were focused on expectations for next year. A catalyst for today's upturn was news from yesterday that Microsoft and the Justice Department had reached a tentative agreement in the historic antitrust case against the software maker.

After soaring $3.69 yesterday, Microsoft slipped 44 cents to $61.40 today. On the downside, Cisco, which is to release third-quarter earnings results on Monday, fell 40 cents to $17.26.

Companies that beat analysts' third-quarter earnings forecasts posted some of Wall Street's biggest wins. Cigna, a provider of employee benefits, climbed nearly 12 percent, up $8.29 at $79.90, after beating per-share expectations by 25 cents.