Dow nears 11,000,
hits 31-month high
Market may pause, some analysts worry
NEW YORK >> Encouraging words from Federal Reserve Chairman Alan Greenspan sent stocks soaring yesterday as investors looked forward with renewed enthusiasm to upcoming earnings reports. The Dow Jones industrials reached a new 31-month high, rising more than 130 points.
The markets got a late-day boost from Greenspan, who told an economic conference in London he was confident that jobs lost during the recent recession could be replaced. He also warned U.S. policy-makers against putting up protectionist trade barriers, saying it could be bad for the global economy.
"I think Mr. Greenspan has given us some hope," said Peter Cardillo, president and chief strategist of Global Partner Securities Inc. "He's confident there will be creation of new jobs and that was what the market wanted to hear."
The Dow gained 134.22, or 1.3 percent, to close at 10,702.51, after a weekly loss of 0.3 percent that ended eight weeks of advances. It was the index's highest finish since June 21, 2001, when it closed at 10,715.43.
The Dow is now slightly more than 1,000 points away from its all-time high close of 11,722.98, reached on Jan. 14, 2000.
The broader gauges also closed higher. Negative for much of the day, the Nasdaq composite index closed up 29.96, or 1.4 percent, at 2,153.83, after last week's 0.8 percent decline ended a six-week winning streak. The tech-heavy Nasdaq last closed higher on June 29, 2001, at 2,160.54.
The Standard & Poor's 500 index closed up 13.82, or 1.2 percent, at 1,155.37, following a weekly rise of 0.1 percent -- its ninth consecutive week of advances. It was the S&P 500's highest close since March 19, 2002, when it finished at 1,170.29.
About one-third of companies in the Standard & Poor's 500 have reported results so far, and earnings are up about 27 percent overall -- better than the 21 percent increase Wall Street had expected. That combined with upbeat economic news bodes well for the economy, but some analysts are starting to worry that the market is overbought and may be headed for a pause.
Although technology and small-cap stocks continue to keep pace, there seems to be a fundamental shift toward higher quality companies, said Joseph Keating, chief investment officer at AmSouth Asset Management.
"Our impression is that the Dow will do a little bit better in 2004 than some of the other indexes," Keating said. "The valuations are looking better, and we think people are really going to come around to appreciate that dividends are tax-advantaged. That's something that got lost in the shuffle last year."