Star-Bulletin news services
Stocks resume rally
NEW YORK >> A late-day wave of momentum buying put Wall Street back on an upward path yesterday, giving stocks a moderate advance despite an absence of major earnings or economic news.
Most of the market's gains came in the final hour. Stocks retraced ground lost earlier in the session when Federal Reserve Chairman Alan Greenspan warned that natural gas prices would be higher for an extended period.
"Today just seems like a pause till we figure out if the market is ready to resume its advance or if we are going to keep paying for what happened last week," when stocks enjoyed huge rallies, said Brian Pears, head equity trader at Victory Capital Management in Cleveland.
Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange. Consolidated volume was a light 1.675 billion shares, below Monday's already thin 1.68 billion.
The Dow ended a lightly traded session up 74.89, or 0.8 percent, at 9,054.89, wiping out much of Monday's 82.79-point loss.
The broader market also moved higher. The Nasdaq rose 23.70, or 1.5 percent, to 1,627.67. The S&P advanced 8.91, or 0.9 percent, to 984.84. The Russell 2000 index rose 6.17, or 1.4 percent, to 450.96.
The price of the Treasury's 10-year note closed up 23/32 point yesterday, while its yield fell to 3.19 percent from 3.28 percent Monday. Two-year Treasury notes were up 1/8 point and yielded 1.11 percent, down from 1.18 percent Monday.
Wall Street has rallied for three months, lifted by better-than-expected first-quarter profits, a quick end to the war in Iraq, a new tax cut package, and improving economic data.
Monday's sell-off represented the first time in three weeks, or since May 20, that all four market gauges declined.
Some analysts say that while the market's fundamentals are improving, it's still hard to explain those robust gains any other way than to say the stocks are simply moving on their own upward momentum.
"I have just sort of said, 'OK, the market is overbought, but so what,' " said Richard A. Dickson, senior market strategist, at Lowry's Research Reports in Palm Beach, Fla.
Market observers got another reason to question stock prices yesterday, when Greenspan said higher gas prices, which are more than twice what they were last year, "have put significant segments of the North American gas-using industry in a weakened competitive position" against industries overseas and that they are likely to persist into the beginning of 2004.
But in his appearance before the House Energy and Commerce Committee, Greenspan did not specifically address whether a prolonged increase in natural gas prices would hinder the economic recovery.
Boeing advanced $1.14 to $34.31 yesterday after Banc of America Securities upgraded it to "buy" from "neutral."
Freddie Mac rose $1.24 to $51.50, having plunged $9.61, or 16.1 percent, Monday when it announced the departure of its top three executives and that it was restating three years' worth of earnings.
Overseas, Japan's Nikkei stock average finished down 0.4 percent. In Europe, France's CAC-40 rose 0.7 percent, Britain's FTSE 100 fell 0.4 percent and Germany's DAX index gained 1.5 percent.
STOCK QUOTES/CHARTS/DATA
