NEW YORK >> Bargain hunting extended Wall Street's rally to a second session today, lifting stocks to their highest level in two weeks. Investors were also encouraged by some positive corporate news. Bargain-hunting
lifts stocksBy Hope Yen
Associated PressAnalysts said many investors were willing to buy on bets that a war with Iraq might not be imminent after all. News that the terror alert warning might be lowered soon also contributed to the advance.
"We're primarily having a technical bounce from an oversold condition," said Todd Clark, head of listed equity trading at Wells Fargo Securities. But he added that there still remains too much uncertainty about a war with Iraq to allow for a continued advance.
"We're probably going to be pulling back a little bit. There's still fog in the horizon," Clark said.
Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange. Volume was light.
The Dow climbed 132.35, or 1.7 percent, to close at 8,041.15, having gained 0.6 percent last week to snap a four-week losing streak. It was the highest level since Feb. 3, when blue chips closed at 8,109.82. Financial markets were closed Monday for the Presidents Day holiday.
The broader market also finished sharply higher. The Nasdaq composite index rose 36.37, or 2.8 percent, to 1,346.54, after climbing 2.2 percent last week. The Standard & Poor's 500 index gained 16.28, or 2 percent, to 851.17, following a weekly advance of 0.6 percent. The Russell 2000 index rose 6.03, or 1.7 percent, to 364.53.
The price of the Treasury's 10-year note was up 5/32 point, while its yield fell to 3.94 percent from 3.96 percent late Friday. Two-year Treasury notes were down 1/32 point and yielded 1.63 percent, up from 1.61 percent late Friday. Bond markets were closed yesterday.
Heinz climbed 37 cents to $31.65 after the food maker reaffirmed its fiscal 2003 forecast.
Investors appeared to be less anxious that a war would begin soon with Iraq after Saddam Hussein's government agreed to allow an American U-2 plane to fly over its territory as part of the U.N. weapons inspection of the country.
Stephen Massocca, president of Pacific Growth Equities, said he believed the fact that war seemed less immediate allowed investors to realize that the economy wasn't doing too badly.
"We had some decent economic numbers coming out last week that was digested over the weekend on industrial production and unemployment claims," he said. "That in combination with the market in an oversold state set up" a rally.
Massocca also questioned the sustainability of the market's recent rally, noting that trading was particularly light today as much of the Northeast dug out from a massive snowstorm.
"I would like to see more volume in these rallies. We haven't seen that, leading me to believe that this might be a temporary rally," he said.
Microsoft climbed 81 cents to $24.96 after the software maker's 2-for-1 stock split.
Zale gained 77 cents to $30.01 after the jewelry retailer posted fiscal second-quarter results that were in line with expectations.
Overseas, Japan's Nikkei stock average finished 0.9 percent lower. In Europe, France's CAC-40 rose 2 percent, Britain's FTSE 100 gained 1 percent and Germany's DAX index advanced 1.2 percent.
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