Dow jumps into positive
territory for 2002

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By Amy Baldwin
Associated Press

NEW YORK >> An upbeat outlook from General Motors and a ratings upgrade of Sun Microsystems gave Wall Street a burst of enthusiasm today, propelling stock prices sharply higher.

A strong housing report also contributed to investors' buoyant mood and helped the Dow industrials surge more than 170 points to their strongest close in six weeks.

But analysts remained wary about the market's ability in the near term to hold onto gains, given last week's fluctuations and ongoing fears about earnings and accounting practices. Buyers have been enticed by cheaper prices following the market's yearlong decline, rather than a belief that business is poised for improvement.

The Dow soared 177.56 to close at 10,145.71 and jump back into positive territory for the year. It was the Dow's strongest close since Jan. 8 when it finished at 10,150.55. The blue chips, which started 2002 at 10,021.50, are now up 1.2 percent.

The broader market was also higher today. The Nasdaq composite index rose 45.34 to 1,769.88 after its fourth consecutive weekly loss.

The Standard & Poor's 500 index advanced 19.59 to 1,109.43.

Advancers outnumbered decliners 3 to 2 on the New York Stock Exchange, with 1,924 up, 1,177 down and 247 unchanged. Trading volume was light at 1.33 billion shares, an indication that investors remain guarded and that many of them are putting off big commitments to stocks.

The NYSE composite index rose 8.08 to 576.36, the American Stock Exchange composite index gained 5.86 to 862.17 and the Russell 2000 index rose 3.12 to 468.19.

The Treasury's 2-year note slipped 1/32 to 100 2/32; its yield rose 3 basis points to 2.97 percent. The 10-year note fell 18 to 100732; its yield gained 2 basis points to 4.85 percent. The 30-year bond lost 932 to 100 632; its yield advanced 2 basis points to 5.36 percent.

General Motors rose $2.37 to $55.48 after raising its first-quarter and 2002 earnings estimates. The world's largest automaker, which cited better-than-expected sales in the United States, also said it is increasing its planned vehicle production.

"That is the kind of news we need to start hearing, and then the market will focus on the economic recovery," said John C. Forelli, portfolio manager for Independence Investment LLC in Boston. Other automakers benefited from GM's news. DaimlerChrysler climbed $1.85 to $39.73.

While economic reports have indicated business is strengthening, the timing of an economic turnaround is still uncertain. Meanwhile, investors are looking to company earnings outlooks as an indicator that business is indeed improving. Analysts have said that when more companies boost their profit projections, stocks are likely to begin a more sustainable rally.

"It seems as though the pieces are falling into place for a traditional earnings and economic recovery in the second half of the year," Forelli said. "What we need is just some positive news from companies. Companies are reluctant to react positively to the economic news until they have their orders firmly in hand."

Blue chips' gains were widespread. Citigroup rose $1.39 to $43.79, while Wal-Mart gained 70 cents to $60.65. Both are Dow industrials.

"Remember the Dow is just 30 stocks, but it is acting very well," said Gary Kaltbaum, market technician for Investors' Edge Partners. "The Nasdaq is still wavering big time. We are still in a major bear market for technology."

Technology, which has suffered most of this year's selling, was lifted by Sun Microsystems. Sun advanced 80 cents to $8.87 after Banc of America raised its rating to "buy" from "market perform," citing an attractive stock price and solid prospects for growth in the second half of 2002.

Other tech winners included wireless provider Qualcomm, climbing $3.21 to $35.91 after reaffirming its forecast for the fiscal second quarter. Citrix Systems rose $1.26 to $14.76 on an upgrade from UBS Warburg to "strong buy" from "buy."

The Dow had just four losing stocks, among which Merck fell 66 cents to $60.84 and DuPont declined 36 cents to $46.95.

Investors were also heartened by a positive report on sales of existing home. The National Association of Realtors reported that sales last month reached a seasonally adjusted rate of 6.04 million, a 16.2 percent jump over the previous month thanks largely to low mortgage rates and consumers' increasing confidence in the economy.