NEW YORK >> Relieved that the U.S. government was lowering the national terror alert level and heartened by reports that Iraq would destroy some missiles, investors bid stocks higher today, reversing much of the previous session's big sell-off. Stocks rise on easing
of U.S. terror alertBy Amy Baldwin
Associated PressPositive economic news -- a report of an unexpectedly strong rise in orders to U.S. factories for big-ticket items -- also fueled the advance.
Still, analysts remained dubious about the market's ability to forge a real upward trend in the face of war fears.
"Until this Iraq situation is resolved the market is always going to be running the risk of getting into this war without knowing what it means" to the economy, said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee.
The Dow Jones industrial average closed up 78.01, or 1 percent, at 7,884.99. The Dow recovered much of its 102.52 loss yesterday. Advancing issues outnumbered decliners more than 2 to 1 on the New York Stock Exchange, where trading was light as it has been all year.
The broader market also rallied. The Nasdaq composite index rose 20.28, or 1.6 percent, to 1,323.96. The Standard & Poor's 500 index advanced 9.73, or 1.2 percent, to 837.28. The Russell 2000 index, which tracks smaller company stocks, rose 3.48, or 1 percent, to 361.45.
The price of the Treasury's 10-year note was up 1/8 point, while its yield fell to 3.75 percent from 3.77 percent yesterday. Two-year Treasury note prices were unchanged and their yield held steady at 1.52 percent.
Wall Street relished news that the Bush administration was lowering the terror alert level from orange -- the second highest status -- to yellow, suggesting that the threat of a terrorist attack in the United States has eased somewhat.
Investors also welcomed the Commerce Department report that orders to U.S. factories for so-called durable goods soared by 3.3 percent in January, the best showing in six months. The jump in orders for items expected to last at least three years was better than the 1 percent advance economists had forecast and was seen as an encouraging sign that the battered manufacturing sector could be rebounding.
Shares of major manufactures traded higher on the durable goods report. DaimlerChrysler rose 73 cents to $30.07, while Maytag advanced 61 cents to $24.11.
Better-than-anticipated earnings and brokerage house upgrades gave other stocks a lift. PG&E Corp. rose 42 cents to $13.19 on fourth-quarter profits that beat analysts' expectations by 3 cents a share.
But Wall Street was disappointed by a report from the Commerce Department that showed sales of new homes plunged by 15.1 percent last month following a record 4.1 percent advance for December. Investors sold off ho
me builders including Centex, down 17 cents to $55.56.
Overseas, Japan's Nikkei stock average finished essentially flat, eking out a gain of just 0.03 percent. In Europe, Britain's FTSE 100 fell 0.7 percent, France's CAC-40 rose 2.2 percent, and Germany's DAX index climbed 2.6 percent.
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