Star-Bulletin news services
Dow jumps up 116,
closes above 9,000
NEW YORK >> The Dow Jones industrial average closed above 9,000 yesterday for the first time in nearly 10 months, soaring more than 100 points following a pair of positive economic reports.
The gains were surprising given some bad news from DaimlerChrysler, which warned of a big loss in its struggling Chrysler division, and the fact that many analysts believe stocks were due for a pullback following weeks of heavy buying.
"People are now looking for reasons to buy stocks, not sell them," said Michael Murphy, head trader at Wachovia Securities in Baltimore.
In its fourth straight advance, the Dow closed up 116.03, or 1.3 percent, to 9,038.98. It was the first time the Dow finished above 9,000 since Aug. 22, when it stood at 9,053.64.
In the past four sessions, the Dow has gained 327.80 points.
The market's broader indicators also climbed. The Nasdaq composite index, already trading at levels not seen in more than a year, rose 31.09, or 1.9 percent, to 1,634.65.
The Standard & Poor's 500 index advanced 14.68, or 1.5 percent, to 986.24. It was also the S&P's fourth consecutive advance, this one bringing the total gained to 36.60.
Advancing issues outnumbered decliners more than 3 to 1 on the New York Stock Exchange. Consolidated volume totaled 2.10 billion shares, up from 1.87 billion on Tuesday.
The Russell 2000 index, which tracks smaller company stocks, rose 7.36, or 1.7 percent, to 451.23. The NYSE composite index jumped 76.83 to 5,558.42. The American Stock Exchange composite index rose 8.50 to 951.16.
Buyers have dominated the market for nearly three months, as companies reported better-than-anticipated first-quarter earnings, the war with Iraq was quick and economic data has strengthened.
Since March 11, when the rallies began, the Dow has risen 20.1 percent, the Nasdaq has gained 28.6 percent and the S&P has increased by 23.2 percent.
The Institute for Supply Management reported yesterday that activity in the service sector grew at a faster-than-expected pace in May, marking the highest level in the indicator since the beginning of the year.
The ISM's non-manufacturing index jumped to 54.5 from 50.7 in April, while analysts had been expecting 51. Any figure above 50 indicates economic expansion.
Earlier yesterday, the Labor Department reported that productivity, the amount of output per hour of work, rose at an annual rate of 1.9 percent in the first three months of the year, slightly stronger than the 1.6 percent growth rate estimated a month ago.
Bob Armknecht, portfolio manager of the Liberty Equity Growth Fund at Columbia Management Advisors in Boston, said the stock market was gaining momentum as investors anticipated further signs of a recovery later this year.
"People have a sense that everything is there for things to get better," Armknecht said.
Among yesterday's winners, Handspring Inc. rose 17 cents to $1.28 on news that the hand-held computer maker agreed to be bought by rival Palm Inc. Palm advanced $2.29 to $14.44.
STOCK QUOTES/CHARTS/DATA
