Bullish investors
stampede Wall St.

The Dow surges 218, the S&P 500 enters
the black for 2002 and the Nasdaq soars 3.1%

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By Lisa Singhania
Associated Press

NEWYORK >> Showing a determination to buy not seen in months, investors bid stocks sharply higher today in a broad rally that propelled the Dow Jones industrials up more than 200 points for the second straight session.

Analysts said the market's growing belief in an impending economic recovery has finally given Wall Street a reason to rally. Blue chips and technology stocks soared, despite an earnings warning from tech bellwether Oracle.

The Dow closed up 217.96, or 2.1 percent, at 10,586.82, its best finish since July 19, when the average was 10,610.00. The Dow has advanced 480.69 since Friday, its biggest two-session point gain since December 2000, and is now up 5.6 percent this year.

Broader stock indicators also advanced. The tech-focused Nasdaq composite index gained 56.58, or 3.1 percent, to 1,859.32, recouping much of its recent losses but still below where it started the year. The Nasdaq is still down 4.7 percent for 2002.

The Standard & Poor's 500 index advanced 22.06, or 2 percent, to 1,153.84, exactly a half-percentage point above its 2002 debut.

Advancers led decliners nearly 3 to 1 on the New York Stock Exchange in heavy trading, with 2,242 up, 930 down and 189 unchanged. Volume came to 1.59 billion issues, compared with 1.44 billion issues Friday.

The NYSE composite index rose 10.26 to 598.89, the American Stock Exchange composite index gained 3.79 to 876.57 and the Russell 2000 index rose 9.66 to 488.00.

The Treasury's 2-year note fell 1/32 to 99 3/4; its yield rose 2 basis points to 3.14 percent. The 10-year lost 5/32 to 99 1/32; its yield gained 2 basis points to 5.00 percent. The 30-year bond was unchanged at 98 5/32; its yield stayed at 5.50 percent.

"People are buying on the expectation that the recession has ended and an economic recovery is now under way," said Alan Skrainka, chief market strategist at Edward Jones of St. Louis. "That said, the market does not move in a straight line up. Investors' nerves will likely be tested again, but for long-term investors, there's no need to sit on the sidelines."

Indeed, the rally reflected momentum created by the barrage of good economic news last week, including strengthening manufacturing numbers and positive comments from Federal Reserve Chairman Alan Greenspan. Analysts also say Wall Street's mood is improving. Investors are looking for reasons to buy -- rather than to sell, as had been in the case in previous weeks amid accounting scandals at Enron and other companies.

Among blue chips, J.P. Morgan rose $2.84 to $32.50. General Motors advanced $3.73 to $58.70.

Transportation stocks surged on better-than-expected revenue and traffic numbers from several airlines. Continental Airlines rose $2.10 to $34.80, while American Airlines' parent company, AMR Corp., climbed $1.80 to $29.05.

The Dow Jones transportation average, which tracks the broader sector, soared 152.83, or 5.3 percent, to 3,049.96.

The tech sector also benefited from Wall Street's inclination to spend. Cisco Systems rose $1.26 to $16.26, while rival Juniper Networks soared $1.90, or 19.3 percent, to $11.73.

Still, Oracle slid $2.32 to $13.67 after Merrill Lynch reduced its rating on the stock from "buy" to "neutral." The announcement followed the software maker's announcement Friday it was reducing estimates for its third-quarter results.

The broader market's advance was the second straight session of significant gains, raising hopes that the long-awaited recovery was beginning. But many analysts advise prudence; they note that stocks are still likely to move up incrementally and that investors, who have watched previous rallies fizzle, are more inclined to take profits rather than risk losing them.

The economic recovery is also expected to be rather subdued, unlike the explosive growth that the market enjoyed in the late 1990s, meaning that profits and stock prices might not rise as much as hoped.

Wall Street appeared to shrug off news of the worst U.S. casualties in the 5-month-old war in Afghanistan. The Pentagon said today nine Americans were killed when a helicopter was shot down over eastern Afghanistan in intense fighting against al-Qaida forces.

"We've allowed ourselves to accept the fact that is going to be a long, drawn-out affair in Afghanistan," said Larry Rice, chief investment officer at Fahnestock & Co. "So we've pushed the war to the back seat and the economy and better-than-expected economic numbers have taken the front position."