Closing Market Report
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Wall Street has its
best day of the year

NEW YORK » Modest growth in the gross domestic product and a drop in oil prices led gave Wall Street its best day of 2005 yesterday as investors at least temporarily set aside inflation fears and picked up bargains in a heavily sold-off market. The Dow Jones Industrial average gained more than 135 points.

According to the Commerce Department, fourth-quarter GDP grew at an annual rate of 3.8 percent, less than the 4 percent economists forecast. The department's price index rose 2.9 percent for the quarter, more than Wall Street expected, but was offset by increases in consumer spending and capital expenditures by businesses.

Along with an upbeat report on the nation's oil reserves, the GDP report prompted Wall Street's strongest day of 2005 on heavy volume. All three major indexes saw their biggest one-day point gains since Dec. 1.

The Dow rose 135.23, or 1.3 percent, to 10,540.93.

Broader stock indicators also gained ground. The Standard & Poor's 500 index was up 16.05, or 1.38 percent, at 1,181.41. The Nasdaq composite index gained 31.79, or 1.61 percent, to 2,005.67, after falling to a five-month low on Tuesday. The Nasdaq closed above the psychologically important 2,000 mark for the first time since March 21.

The drop in oil prices came after the Energy Department reported a 5.4 million barrel increase to the nation's crude oil reserves. Light, sweet crude futures were down 24 cents at $53.99 per barrel on the New York Mercantile Exchange, though oil prices had fallen as low as $52.50 per barrel earlier in the session.

The dollar fell against most major currencies, while gold prices rose. The bond market built on Tuesday's strong gains, with the yield on the 10-year Treasury note slipping to 4.55 percent, from 4.58 percent late Tuesday.

Investors were also looking ahead to a pair of economic reports tomorrow -- the Labor Department's March employment figures and the Institute for Supply Management's monthly report on the industrial sector. Economic data, particularly employment data, has been closely watched as the Federal Reserve plots its rate-tightening policy, and Wall Street is eager to know whether the next hike will be a 0.25 percentage point move like all the others, or a more aggressive half-point rise.

Qwest Communications International Inc. lost 2 cents to $3.77 after a Goldman Sachs analyst said the company would likely continue to pursue a merger with MCI Inc., which agreed to a $7.6 billion takeover by Dow industrial Verizon Communications Inc.

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by Financials.com

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