Star-Bulletin news services
Stocks jump around,
but end with gains
NEW YORK >> Wall Street waffled its way to gains yesterday as mixed economic news and deadly bombings in Iraq and Israel revived investors' caution following Monday's big rally. The Nasdaq composite index rose to its highest level in 16 months.
"We continue to be taking some comfort in improving economic data," said Jack Caffrey, equities strategist at J.P. Morgan Private Bank. But "while investors want to anticipate the (good) news we have been getting recently, they are at the same time being cautious about prices."
The major indexes fluctuated throughout the session. After falling as much as 60.72, the Dow Jones industrial average closed up 16.45, or 0.2 percent, at 9,428.90. On Monday, the Dow gained 90.76 to close at its highest level in 14 months, or since June 20, 2002.
The market's broader gauges were also higher. The Nasdaq composite index rose 21.62, or 1.2 percent, to 1,761.11, its highest closing level since April 19, 2002, when it stood at 1,796.83.
Analysts said the Nasdaq was able to post a bigger gain than the other major indexes because its smaller company components haven't rallied with the same intensity as Dow and S&P stocks. Investors are also more inclined to buy stock in smaller firms and tech companies when the economy is growing.
The Standard & Poor's 500 index advanced 2.61, or 0.3 percent, to 1,002.35. The Russell 2000 index, which also tracks smaller company stocks, advanced 7.78, or 1.6 percent, to 488.70. The NYSE composite index inched up 5.79 to 5,657.80. The American Stock Exchange composite index rose 2.59 to 964.49.
Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange. Consolidated volume totaled 1.66 billion shares, up from 1.46 billion on Monday.
While economic data have been improving, the market has advanced only modestly during the month of August, typically a slow time on Wall Street as traders and investors take summer vacations.
"We're obviously in the summer doldrums, but you know this market wants to go up," said Scott Wren, equity strategist for A.G. Edwards & Sons.
The market's upward momentum was slowed somewhat by a Dow Jones Newswires report on the University of Michigan's preliminary August consumer sentiment index. Sentiment so far this month stands at 90.2, below July's 90.9 level and beneath analysts' forecast of 91.2.
Investors closely monitor consumers' moods because their spending accounts for two-third of the economy. By the end of trading yesterday, investors had decided that consumer sentiment is at healthy levels.
"Consumer confidence, while not as high as expected, is still rather positive at comfortably over 90," Caffrey said.
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