Blue chips enjoy
best gains in 10 weeks

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By Amy Baldwin
Associated Press

NEW YORK >> Wall Street finished a tumultuous week on an upbeat note today, with stocks posting a solid advance and raising hopes that after more than two months of selling, the worst of the market's decline might be over. The gain helped the Dow Jones industrials achieve their biggest weekly advance in 10 weeks.

"We are starting to get investor interest back into the marketplace," said Arthur Hogan, chief market analyst at Jefferies & Co.

The week, which saw the Dow make its second largest one-day point gain, also marked the first time since July 1-5 that the Dow, the Nasdaq composite index and the Standard & Poor's 500 index all had two winning sessions.

Advancing issues outnumbered decliners more than 3 to 2 on the New York Stock Exchange. Volume was light. The Dow closed up 78.08, or nearly 1 percent, at 8,264.39. The blue chips ended the week up 3 percent, their best showing since they rose 4.2 percent the week of May 17.

The market's other major indexes also advanced. The Nasdaq rose 22.03, or 1.8 percent, to 1,262.11. The S&P 500 advanced 14.16, or 1.7 percent, 852.84. The Russell 2000 index rose 4.14, or 1.1 percent, to 382.25.

But the week was mixed for the broad market with the Nasdaq falling 4.3 percent and the S&P 500 rising 0.6 percent. The three indexes have not all had a weekly gain since May 17.

The price of the Treasury's 10-year note was down 1/32 point today, while its yield held steady at 4.38 percent. Two-year Treasury notes were up 3/32 point and yielded 2.21 percent, down from 2.27 percent yesterday.

Analysts believe that investors -- both individual and institutional -- are beginning to feel more at ease after driving prices to five-year lows over the past 10 weeks. But investors are still tentative as the market's steep declines are still fresh.

"There is a belief that there is a near-term bottom in place and that has bolstered some confidence," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.

Mutual fund managers, Kleintop said, "feel more comfortable with their cash flows, that investors aren't going to pull money out, and the valuations make them feel excited about doing some buying."

Analysts said the lower prices are going to be the biggest factor in getting investors back into the market. But, at the same time, the buying won't be long lasting unless investors' confidence in corporate bookkeeping is restored.

Substantial progress toward rebuilding sentiment was made Wednesday when executives from Adelphia Communications were arrested for allegedly looting the company. And, House and Senate negotiators on Wednesday agreed on legislation that would create tougher penalties for corporate fraud. The Dow soared 488 points, its second biggest one-day point gain ever.

"All of that is part of the process that instills confidence back in the system," Hogan said. "It feels like we are at a juncture where people want to get back into the game."

Among today's winners, Dow industrial Microsoft rose $2.52 to $45.35 on news it would increase by 22 percent its sales force dedicated to its SQL Servers, according to Dow Jones Newswires.

Qualcomm advanced 34 cents to $25.99 on profits that were two cents a share higher than expectations.

Chip equipment makers advanced after Goldman Sachs upgraded several companies, noting that "while fundamentals are not likely to improve in the near-term, we believe that funds flow and seasonality may drive a meaningful move in the stocks."

Overseas, Japan's Nikkei stock average finished down 3.4 percent. In Europe, Britain's FTSE 100 rose 1.3 percent, France's CAC-40 gained 0.7 percent, and Germany's DAX index advanced 1.7 percent.