NEW YORK >> Hopes for an end to a West Coast labor standoff soothed investors today, prompting them to buy stocks and give the market its first advance in five sessions. Stocks gain on hopes
for dock reopeningBy Amy Baldwin
Associated PressAnalysts said investors were anxious for a reason to buy stocks after driving down prices for six straight weeks and the previous four sessions in particular. But investors are also wary of committing to the market given uncertainty over earnings, the economy and the possibility of war with Iraq.
Investors' wide-ranging emotions were evident in how stocks fluctuated throughout today's session. The Dow Jones industrials rose as much as 199 in afternoon trading, having dropped as much as 91 earlier.
"People are looking for a rally after stocks have been knocked down so relentlessly," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. " The market has been selling off because of a weakening economy and consistent lowering of earnings forecasts. The market is looking for that to turnaround, and that just hasn't happened yet."
Despite the advance in the stock indexes, declining issues outnumbered advancers 15 to 13 on the New York Stock Exchange. Trading volume was moderate.
The Dow closed up 78.65, or 1.1 percent, at 7,501.49. It was the Dow's first progress in five sessions, on the heels of a four-day loss of 515.95.
The market's broader indicators were also higher after four straight days of selling. The Nasdaq composite index rose 9.72, or 0.9 percent, to 1,129.12, but was still trading at closing levels last seen in August and September 1996.
The Standard & Poor's 500 index advanced 11.14, or 1.4 percent, to 796.42. The Russell 2000 index, which tracks smaller company stocks, rose 0.48, or 0.1 percent, to 338.77.
Analysts attributed the advance largely to optimism that the 10-day standoff between West Coast longshoremen and shippers would end.
The price of the Treasury's 10-year note was down 3/32 point today, while its yield rose to 3.62 percent from 3.61 percent late yesterday. Two-year Treasury notes fell 3/32 point and yielded 1.79 percent, up from 1.74 percent yesterday.
Late Tuesday afternoon, the longshoremen's union agreed to go back to work Wednesday under a 30-day contract extension. Also, President Bush directed government lawyers Tuesday to go to court to seek an injunction to end the labor dispute.
Lower stock prices also contributed to the advance. All three indexes have suffered six straight weeks of declines on worries about Iraq and third-quarter earnings, which companies will be reporting over the next few weeks.
Among Tuesday's winners on Wall Street, PepsiCo soared $5.32, or nearly 15 percent, to $41.10 on third-quarter earnings that were a penny a share higher than analysts' estimates and an upbeat outlook for yearly profits. Sara Lee advanced 47 cents to $19.90 on an upgrade from Lehman Brothers. And, General Electric, which reports earnings results on Friday, rose 40 cents to $23.35.
Overseas, Japan's Nikkei stock average finished up 0.2 percent. In Europe, France's CAC-40 lost 1.4 percent, Britain's FTSE 100 fell 1.3 percent, and Germany's DAX index declined 1.7 percent.