Dow soars to second
triple-digit win

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By Amy Baldwin
Associated Press

NEW YORK >> A burst of buying swept across the stock market today, giving the Dow Jones industrials their second straight triple-digit gain for the first time in nearly three months.

After a session spent vacillating between modest gains and losses, the market began to climb sharply higher in the last hour of trading. The Dow rose 182 points.

Analysts attributed the late-day surge to big institutional investors' placing bets on stocks, which triggered a wave of buying. Better-than-expected earnings and expectations of another interest rate cut by the Federal Reserve, which meets next week, also contributed to the gains.

"It's momentum driven," said Arthur Hogan, chief market analyst at Jefferies & Co. "There's some enthusiasm for Cisco's numbers and what the Fed may do next week. That started momentum that no one wanted to get in the way of."

Advancing issues outnumbered decliners about 5 to 3 on the New York Stock Exchange. Volume was moderate at 1.48 billion shares, below Tuesday's 1.52 billion.

The Dow closed up 182.06, or 2.2 percent, at 8,456.15, after climbing 230.46 on yesterday. The last time the blue chip index scored two straight triple-digit advances was May 13-14. Meanwhile, the Dow has endured seven triple-digit losing streaks in that time.

The broader market also posted gains. The Nasdaq composite index rose 21.35, or 1.7 percent, to 1,280.90, after advancing 53.54 yesterday. The Standard & Poor's 500 index advanced 17.20, or 2 percent, to 876.77, following yesterday's gain of 24.97. The Russell 2000 index rose 2.68, or 0.7 percent, to 383.47.

The price of the Treasury's 10-year note was up 3/16 point today, while its yield fell to 4.31 percent from 4.33 percent late yesterday. Two-year Treasury notes were up 3/32 point and yielded 1.98 percent, down from 2.04 percent yesterday.

Cisco rose 92 cents to $12.99. Late yesterday, Cisco reported slightly stronger-than-expected profits for its fiscal fourth quarter, but a cautious outlook for the rest of the year.

Other networking shares also advanced, including Broadcom, up 30 cents at $17.42.

Among blue chips, drug stocks rose on stronger-than-expected earnings from Watson Pharmaceuticals. Watson rose $1.80 to $20.90, and Eli Lilly advanced $2.88 to $55.52.

Retailers traded higher ahead of July sales results due out Thursday. Wal-Mart climbed $1.10 to $48.38, and Best Buy rose 80 cents to $30.80.

Buying was so widespread that even financial stocks rose, despite Merrill Lynch cutting its outlook on several brokerages. Goldman Sachs rose $1.05 to $70.95, and Morgan Stanley gained 33 cents to $38.39.

Still, analysts were guarded about reading too much into the market's two-day rally, saying investors are still feeling guarded about the market's prospects. After a string of disappointing economic reports -- including weaker-than-expected second-quarter gross domestic product -- investors are also worried that the economy could slip back into recession.

"Valuations are still high, earnings are not very good, and the economy is soft, so it's tough to get a lot of progress to the upside with all this overhang," said Gary Kaltbaum, a market technician for Investors' Edge Partners in Orlando, Fla. "This volatility is not going to go away anytime soon."

Others said Wall Street's gains are vulnerable, because they stem largely from institutional investors, such as hedge fund managers, who capitalize on moving quickly in and out of the market.

"The markets are so volatile and so thin. There's just no reason for people to go out and throw everything in the market right now," said Michael Murphy, head trader for Wachovia Securities.

Overseas, Japan's Nikkei stock average finished Wednesday with a gain of 3.5 percent. In Europe, France's CAC-40 fell 0.4 percent, Britain's FTSE 100 declined 0.9 percent, and Germany's DAX index dropped 2.9 percent.