S&P hits highest
level since 9/11

NEW YORK » The Standard & Poor's 500 index reached its highest close since the Sept. 11, 2001, terror attacks yesterday as stocks surged on the Federal Reserve's upbeat assessment of the economy and a sharp drop in oil prices.

Continuing a rally that started before the presidential election, Wall Street enjoyed impressive gains after Wednesday's Fed policy statement, which outlined an improving labor market and little danger of inflation. The Fed raised the benchmark interest rate a quarter percentage point to 2 percent, as was widely expected.

Falling oil prices also spurred buyers. A barrel of light crude was quoted at $47.42, down $1.44, on the New York Mercantile Exchange.

Despite the solid advance, trading was muted somewhat as the bond markets closed for the Veterans Day holiday. Bonds can have an impact on stock trading, and some analysts questioned whether yesterday's rally would set the stage for further highs.

"You have to take today's action with a grain of salt, what with bonds not trading today, but sure, it's nice to see things moving up," said Bryan Piskorowski, market analyst at Wachovia Securities. "But really, with the jobs report last week and the Fed move, the market's still treading water, and we're going to need another catalyst to break out higher."

The S&P 500 was up 10.57, or 0.91 percent, at 1,173.48, its best showing since Aug. 27, 2001.

Other stock indicators also rose substantially. The Dow Jones industrial average rose 84.36, or 0.81 percent, to 10,469.84, its best closing level since June 23. The Nasdaq composite index gained 26.71, or 1.31 percent, to 2,061.27. The Nasdaq last closed above that level on April 12.

After three days of minimal moves, the major indexes saw a resurgence of the rally first spurred by a relatively smooth presidential election, continuing drops in crude oil futures and a better-than-expected jobs report on Friday. November and December are also traditionally the strongest months for the stock market.

Despite the gains, the volume of shares traded dropped off from recent sessions, and analysts said many investors were waiting to see whether there would be a selloff based on profit taking -- or whether stocks would defy conventional wisdom and move higher.

PeopleSoft Inc. was down 36 cents to $22.43 after its board rejected Oracle Corp.'s latest $9.2 billion bid to take over the rival software company. Board members said the $24-per-share offer undervalued PeopleSoft. Oracle lost 24 cents to $13.14.