NEW YORK >> Wall Street rebounded today from a four-day selloff as investors, curbing their disappointment over a weaker-than-expected manufacturing report, decided to take some chances on lower-priced stocks. Bargain hunters
prop up marketBy Amy Baldwin
Associated PressThe advance was a predictable reaction to the market's sharp declines of the last few sessions rather than a signal that investors' confidence in the economy or stocks has improved. Investors also bid shares higher despite their ever-present anxiety about the war with Iraq.
The Dow Jones industrial average closed up 77.73, or 1 percent, at 8,069.86, according to preliminary calculations. The bounce followed a four-day loss of 288.10.
The broader market was also higher. The Nasdaq composite index rose 7.12, or 0.5 percent, to 1,348.29. The Standard & Poor's 500 index advanced 10.29, or 1.2 percent, to 858.47.
Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange where trading was light as it has been for months due to war worries.
The Russell 2000 index, the barometer of smaller company stocks, rose 4.15, or 1.1 percent, to 368.69.
Wall Street's advance was moderate compared with its steep four-day declines. The market is also on edge about first-quarter earnings that companies will report later this month.
Still, the market was able to overcome disappointment news from the Institute for Supply Management, which reported that business at U.S. factories decreased for the first time in five months. The institute blamed the war for a plunge in new orders to manufacturers.
The group's index of business activity fell to 46.2 in March, slipping from February's 50.5 reading. The report was worrisome for two reasons: A reading below 50 means manufacturing activity is contracting, and it was weaker than the 49 level that economists predicted.
Analysts said the market was able to shake off the discouraging economic news only because investors were interested in picking up bargain stocks.
Many analysts have also downplayed the effect of economic news on the market these days.
"I don't see day-to-day economic news being as important as the war. Only if (economic reports) can surprise on the upside would that change, and I don't think that is going to happen in the near future," said Matt Brown, head of equity management at Wilmington Trust.
They expect the market to make most of its moves based on war fears and developments in Iraq as investors have come to expect disappointing news about the economy.
"The next move is to the upside when we see conclusive evidence of victory (in Iraq), but when that happens, no one knows," said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray.
Overseas, Japan's Nikkei stock average finished Tuesday up 0.2 percent. In Europe, Britain's FTSE 100 advanced 2 percent, France's CAC-40 rose 0.6 percent and Germany's DAX gained 1.1 percent.
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