Wall Street
scores big wins

But the market faces economic
hurdles in September

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By Amy Baldwin
Associated Press

NEW YORK >> Finally, Wall Street is making some progress, with five straight winning weeks that pushed the Dow Jones industrials back above 9,000.

The market's broader gauges are also advancing with the Standard & Poor's rising for five weeks in a row, and the Nasdaq composite claiming three consecutive winning weeks.

But because the stock market tends to look forward rather than revel in the past, analysts warn that it might suffer setbacks in the coming weeks, as companies issue their third-quarter earnings warnings, another series of economic reports is released and the nation marks the anniversary of the terror attacks.

Many analysts believe the market hit a low in a grueling 11-week sell-off that ended three weeks ago. The Dow has regained 1,170 points since its July 23 low of 7,702.34. On Thursday, the blue chips also made their first close above 9,000 for the first time since July 9, although they fell back yesterday.

This past week also marked the first time in nine months that the major indexes all had three consecutive weekly gains. The last time that happened was the three-week period ending Nov. 23.

"I think the capitulation stage is behind us," said Kevin Caron, market strategist at Ryan, Beck & Co.

But market observers are wary of getting too excited too soon, acknowledging that September is likely to be trying for Wall Street.

Many in the investment community are uncertain how investors will handle the one-year anniversary of the attacks, but they do expect the economy to weigh on the market.

"What we're going to have to look for now are signs of improvements" as economic reports are released during the course of the month, Caron said.

Companies' third-quarter profit forecasts -- whether they are good, bad or as expected -- will also play a role in how stocks fare.

Analysts say the market's next big test will come the first week in September when the Institute for Supply Management reports on manufacturing activity in August and the Labor Department reports on employment for August.

Thinking longer-term, however, some observers caution against reading too much into the market's recent strides. And, no matter if the economic news turns positive, the fact is that no one is ready to declare the bear market over yet.

"This rally looks like, acts like and feels like every big bear market rally that has happened in the past," said Gary Kaltbaum, market technician for Investors' Edge Partners in Orlando. "They make you feel better. They suck you in and then bury you a few months later."

For the week, the Dow rose 94.90, or 1.1 percent, despite dropping 180.68 yesterday. The blue chips closed the week at 8,872.96.

The Nasdaq had a weekly gain of 19.61, or 1.4 percent. Yesterday, the Nasdaq fell 42.33 to 1,380.62.

For the week, the S&P 500 advanced 12.09, or 1.3 percent. Yesterday, the S&P fell 21.84 to 940.86.

And the Russell 2000 index recorded a weekly advance of 4.16, or 1.1 percent. Yesterday, the Russell fell 9.54 to 400.13.

The Wilshire Associates Equity Index, which represents the combined market value of all New York Stock Exchange, American Stock Exchange and Nasdaq issues, ended the week at $8.876 trillion, up $106.61 billion from the previous week. A year ago, the index was $10.948 trillion.