Stocks rally after Fed
offers recovery hopes

---

By Amy Baldwin
Associated Press

NEW YORK >> The Federal Reserve gave Wall Street today the positive economic outlook investors have been seeking, and stocks rallied even though the central bank declined to lower interest rates again.

Investors have been anxiously awaiting word that the recession has ended, and a Fed statement that "economic activity is beginning to firm" brought buyers back into the market. The market's upturn contrasted with lackluster trading earlier today and with a big selloff yesterday, when investors ditched shares on concerns about companies' accounting practices.

"The Fed gave out some positive signals. The Fed indicated there are signs of improving economic activity. The comment was made that while we are not yet out of the woods, the recession could be shallow," said Alan Ackerman, executive vice president of Fahnestock & Co. "There is a sense of buying opportunity here."

The Dow Jones industrial average closed up 144.62 at 9,762.86 after tumbling 247.51 yesterday. The Nasdaq composite index rose 20.45 to 1,913.44 following yesterday's 50-point drop. The Standard & Poor's 500 index gained 12.93 to 1,113.57 after falling 32 yesterday. Advancers led decliners on the New York Stock Exchange, with 1,883 up, 1,222 down and 211 unchanged. Volume was 1.97 billion shares. The NYSE composite index rose 5.61 to 570.54, the American Stock Exchange composite index gained 8.28 to 834.97 and the Russell 2000 index rose 5.74 to 479.72.

The Treasury's 2-year note fell 6/32 to 99 - 27/32; its yield gained 10 basis points to 3.08 percent. The 10-year note lost 1/2 to 99 - 30/32; its yield rose 7 basis points to 5.01 percent. The 30-year bond dropped 22/32 to 99 - 5/32; its yield rose 5 basis points to 5.43 percent.

The Fed's optimistic assessment lifted stocks broadly. Home Depot rose $2.07 to $49.07, Honeywell gained $2.06 to $32.96 and J.P. Morgan Chase advanced $1.01 to $33.06.