Industrial output gain
catapults stocks higher

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By Amy Baldwin
Associated Press

NEW YORK >> The strongest industrial production numbers since June 2000 gave stocks a solid advance today, but analysts said Wall Street nonetheless seemed guarded as investors await more proof that companies are benefitting from the improving economy.

A consumer sentiment survey suggesting confidence remains steady also pleased the market, but analysts said Wall Street's response seemed more like a rebound than a rally. They said investors are growing more optimistic that the worst is over, but want to see profits rise before sending stocks too much higher.

"The economic news is making us feel a little bit better, but I think the key to the market going forward is that first-quarter results need to get better," said Nick Sargen, global market strategist at J.P. Morgan Private Bank. "We've got to start seeing consistent evidence that earnings have turned for the positive."

The Dow Jones industrial average closed up 90.09 at 10,607.23. The Standard & Poor's 500 index was up 13.12 at 1,166.16. The Nasdaq composite index gained 14.16 to 1,868.30.

The New York Stock Exchange composite index rose 6.33 to 607.13, the American Stock Exchange composite index gained 4.91 to 891.65 and the Russell 2000 index advanced 1.36 to 499.12.

Volume was unusually heavy, reflecting the quarterly expiration of stock futures and options.

Advancers led decliners 3 to 2 on the NYSE, with 1,867 up, 1,273 down and 187 unchanged. Volume was 1.47 billion shares vs. 1.21 billion yesterday.

Also, today's session was what's known as a triple-witching session, the quarterly expiration of index futures and index and stock options.

The Treasury's 2-year note was unchanged at 98 29/32; its yield fell 1 basis point to 3.59 percent. The 10-year note gained 17/32 to 96 15/32; its yield fell 7 basis points to 5.34 percent. The 30-year bond jumped 11/32 to 94 21/32; its yield fell 8 basis points to 5.76 percent.

For the week, the Dow rose 0.3 percent, the Nasdaq fell 3.2 percent and the S&P lost 0.2 percent.

Stocks turned positive early today on a Federal Reserve report showing a bigger-than-expected 0.4 percent increase in output at the nation's factories, mines and utilities during February. The data was the strongest evidence yet that manufacturing is emerging from its long downturn and that the recession that began a year ago is easing.

Meanwhile, a University of Michigan report was said to show consumer sentiment at higher-than-expected levels. The consumer confidence index rose to 95.0 this month after standing at 90.7 at the end of February and 93.0 in January, according to Dow Jones News.

In trading today, investors bid financial stocks higher, including American Express, which gained $1.54, or 3.8 percent, to $42.15.

Manufacturing stocks also advanced. General Motors rose 85 cents to $60.75, while Caterpillar rose $1.13 to $59.79.

Tech stocks were mixed on concerns the beleaguered sector will turn around at a slower pace than the rest of the economy. Oracle tumbled 84 cents, or 6.3 percent, to $12.60 after reporting disappointing third-quarter results and warning that its returns won't improve before summer. The software maker is the latest tech company to reduce its forecast citing weak business.

But Microsoft rose $1.27 to $62.49, rebounding from losses earlier this week caused by concerns its growth would be less vigorous than hoped.

"The focus of the marketplace has moved away from technology stocks since they're likely to be slow growers for a while," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "A year ago, if tech or telecom weren't doing well, it was poison for the overall market. That's no longer true."

Indeed, although the tech sector's problems have pressured stocks in recent days, what's really held the market back is investor frustration. For the last two weeks, report after report have indicated the economy is strengthening. But company profits have yet to catch up. First-quarter earnings, due out next month, could provide some reassurance, but until then most analysts expect a cautious market.