Electronic retailers,
housing boost stocks

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By Amy Baldwin
Associated Press

NEW YORK >> A strong jump in November housing construction propelled stock prices to sharp gains today and fueled investors' hopes that the economy is improving.

Better-than-expected earnings from electronics retailers Best Buy and Circuit City also contributed to the market's advance. Combined with the housing report, the news improved investors' outlook for the economy, two-thirds of which is comprised of consumer spending.

"There are a lot of reasons to be optimistic," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. Among them, he said, are the year's 11 interest rate cuts and companies' improved earnings results and projections.

The Dow closed up 106.42 at 9,998.39. The Dow advanced 80 points yesterday. The Nasdaq rose 17.31 to 2,004.76. Throughout this month, the Dow and Nasdaq have traded just above and below 10,000 and 2,000 respectively, and until December had not risen above those marks since before the Sept. 11 terror attacks.

Wall Street's broadest measure, the Standard & Poor's 500 index, gained 8.56 to 1,142.92.

Advancers outnumbered decliners slightly more than 3 to 2 on the New York Stock Exchange, with 1,984 up, 1,151 down and 220 unchanged. Volume was 1.32 billion shares.

The NYSE composite index gained 4.71 to 580.56, the American Stock Exchange composite index rose 1.97 to 825.72 and the Russell 2000 index advanced 5.54 to 485.48.

The Treasury's 2-year note rose 232 to 99 2632; its yield fell 4 basis points to 3.09 percent. The 10-year note gained 1232 to 98 3132; its yield fell 5 basis points to 5.13 percent. The 30-year bond rose 2232 to 97 3032; its yield fell 5 basis points to 5.52 percent.

Investors, who have been looking for evidence of an economic recovery, welcomed the Commerce Department's report that housing construction rose 8.2 percent in November. The increase was bigger than analysts were expecting and brought housing starts to their highest level since July as builders bet that low mortgage rates would continue to attract buyers.

Home builders posted healthy gains, led by Lennar, which soared $2.75 to $44. Lennar said its fourth-quarter earnings estimates will exceed Wall Street's forecast by 25 percent.

Other winners included Best Buy, which rose $3.55 to $72.55 on fiscal third-quarter earnings that were 40 percent higher than the same period last year and beat analysts' expectations by a penny a share. Competitor Circuit City, which also posted better-than-expected profits, inched up 16 cents to $23.86.