Dow, Nasdaq score NEW YORK >> Wall Street reveled in its best day in five months today as the Dow Jones industrials surged nearly 270 points and the Nasdaq composite index soared by more than 60 on investor hopes that a U.S. war with Iraq would be short and successful.
best daily gains
in five months
By Amy Baldwin
Associated PressThe Standard & Poor's 500 index scored its the second best day of 2003. Still, the rally was also an expected rebound following weeks of selling.
Optimism about the outcome of a military conflict allowed investors to shrug off a discouraging retail sales report. Trading volume was the healthiest it has been all year.
"There is the expectation that Iraq will be resolved soon and the price of oil will come down and the outlook for the economy will improve and stock prices will rise. A lot of active investors are positioning themselves for that outcome," said Hugh Johnson, chief investment officer for First Albany Corp.
Analysts said Wall Street was encouraged by a CNN report that said the Iraqi army was expected to surrender soon after the United States begins military action.
"The global consensus about the outcome of war with Iraq has become more positive, said Kevin Caron, market strategist at Ryan, Beck & Co. LLC. "The suspicion is that any engagement with Iraq may go better than expected."
Advancing issues outnumbered decliners more than 3 to 1 on the New York Stock Exchange where trading volume was at the heaviest levels it has been all year.
The Dow closed up 269.68, or 3.6 percent, at 7,821.75. It was the Dow's biggest one-day win in five months, or since Oct. 11 when the blue chip average rose 316.34 to close at 7,850.29.
The broader market also spiked sharply higher. The Nasdaq composite index rose 61.54, or 4.8 percent, to 1,340.78. It was also the Nasdaq's best one-day gain in five months, or since Oct. 15 when it gained 61.91 to close at 1,282.44. The S&P climbed 27.71, or 3.5 percent, to 831.90. The S&P's gain its second best of the year, falling behind the 29.21-point advance made on Jan. 2. The Russell 2000 index rose 9.51, or 2.8 percent, to 355.45.
The price of the Treasury's 10-year note was down 1 3/8 point, while its yield rose to 3.75 percent from 3.59 percent late yesterday. Two-year Treasury notes were down 9/32 point and yielded 1.58 percent, up from 1.43 percent yesterday.
"This is a statement about the war. The reason I say that is it is not just that the stock market is going up, it is that the traditional safe havens are not performing well. Treasuries are going down and gold is going down," Johnson said.
But analysts are still dubious of stocks' ability to sustain a true advance until there is more clarity about a war.
"It has enough juice in it today that the sellers have actually gone to the sidelines," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray in Minneapolis. But "if you are trying to figure out what the next chess move is, you can't."
Overseas, Japan's Nikkei stock average finished down 0.9 percent. But stocks rallied strongly in Europe. France's CAC-40 surged 6.3 percent, Britain's FTSE 100 soared 6.1 percent and Germany's DAX index rallied 6.9 percent.
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