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Market rebounds,
worst may be over
NEW YORK >> A solid reading on the economy gave investors some badly needed reassurance yesterday, propelling the Dow Jones industrials up 170 points and the Nasdaq composite index up 3 percent. But analysts were divided over whether the rally signaled an end to Wall Street's correction or was simply fueled by bargain-hunting.
The market has been in a corrective phase for about nine weeks, weighed down by a number of factors, from concerns over high stock valuations to fears about global terrorism. While it was not clear whether the advance would be sustained, the worst is probably over, said Alfred E. Goldman, chief market strategist with A.G. Edwards Inc. in St. Louis.
"We think the correction has probably done its dastardly deed and the primary trend remains up," Goldman said. "The outlook for the economy remains positive, the forecasts for corporate earnings are up. ... I would advise people who are on the sidelines to do some selective buying."
The Dow rose 170.59, or 1.7 percent, to 10,218.82, after declining more than 250 points over the last five sessions. It was the Dow's biggest one-day point change since Oct. 1, when it added 194.14 to close at 9469.20.
The broader gauges were also markedly higher. The Nasdaq soared 57.69, or 3.0 percent, to 1,967.17. It was the biggest one-day change on the Nasdaq since Sept. 24, when the index fell 58.02 points, or 3.1 percent, to 1,843.70.
The Standard & Poor's 500 index gained 17.86, or 1.6 percent, to 1,109.19. It was the S&P 500's most significant one-day move since Oct. 1, when it rose 22.25 to close at 1,018.22.
The price of the Treasury's 10-year note fell 1/4 point, while its yield rose to 3.74 percent from 3.71 percent Wednesday. Two-year Treasury notes were up 1/32 point and yielded 1.44 percent, down from 1.47 percent.
Investors got some solace before the market opened when the Commerce Department confirmed estimates that the economy grew at a solid 4.1 percent annual rate during the last quarter of 2003. The gross domestic product, which measures the value of all U.S. goods and services, is considered the most important barometer of the economy's health.
Wall Street forecasts call for 4.5 percent GDP growth through the first half of this year, as tax incentives motivate consumer and business spending. But that level of growth may not be sustainable if the labor market doesn't improve dramatically.
Underscoring the painfully slow job growth that has hobbled the recovery, the Labor Department reported new claims for unemployment benefits rose last week by a seasonally adjusted 1,000 to 339,000. Many on Wall Street are hoping for positive news in the government's March jobs report, due at the end of next week.
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