Dow Up 169 in Afternoon Trading
Nov. 04, 2002
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NEW YORK (AP) _ Wall Street's momentum from a month of gains extended into another week as investors responded Monday to a federal judge's approval of Microsoft's antitrust settlement. The Dow Jones industrials rose more than 160 points.
In midafternoon trading, the Dow was up 168.82, or 2 percent, at 8,686.46, getting most of is boost from Microsoft. On Friday, the Dow rose 120.61.
The broader market also posted big gains. The Nasdaq composite index surged 51.16, or 3.8 percent, to 1,411.86, preparing for its biggest close in two weeks _ or since Oct. 15 when it rose 61.91. The Standard & Poor's 500 index advanced 19.42, or 2.2 percent, to 920.38.
``People are certainly in a buying mood,'' said Brian Belski, fundamental market strategist for US Bancorp Piper Jaffray.
The market built on four straight weeks of advances that followed better-than-expected third-quarter earnings and hopes that the economy is indeed getting stronger. The stock indexes hadn't had a four-week winning stretch since the period that ended Aug. 23.
``It's a combination of the fact that the market has been rallying and that October was a good month,'' said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. ``The market is just more optimistic than it had been.''
Tuesday's congressional election was on the minds of investors, many of whom are hopeful that the Republican party _ which favors corporate and individual tax cuts _ would take over leadership of the Senate and keep its control of the House.
But analysts weren't sure that those hopes, already a factor in the recent advance, contributed to Monday's gains. If anything, the market could pull back if there isn't a GOP sweep or if the party simply maintains control of the House.
Analysts also credited the buying spree in part to investors' hopes that the Federal Reserve would lower interest rates when it meets Wednesday. But other analysts said that what investors really want to hear is that the economy is turning around and perhaps doesn't need more rate cuts.
Anticipation of a rate cut perhaps soothed investors following news from the Commerce Department that factory orders fell 2.3 percent in September, the second straight monthly decline. However, analysts were expecting worse, a 3 percent drop.
But whatever the reason for the market's recent advances, analysts are encouraged to see the market making progress despite negative economic news. On Friday, stocks climbed in the face of three disappointments: declines in consumer spending and manufacturing activity and an increase in the nation's unemployment rate.
``There has been disappointing news, but the market has been ignoring it. It kind of tells you that the market was oversold and there was cash around,'' Berman said.
Among Monday's big winners, Microsoft jumped $3.40 to $56.40 on a federal judge's ruling late Friday upholding the company's antitrust settlement with the Justice Department.
The software maker's news was a big boon to the overall tech sector. Cisco Systems climbed 98 cents to $12.59, while Intel rose 72 cents to $19.02.
``Tech got way overdone on the downside, and it is an important area of investment. It got to be so hated. It was hated as much as it was loved. We needed to see that balance,'' said Scott Bleier, president of Hybridinvestors.com, a research advisory service. ``Now some of those stocks that got so beaten down, have become value stocks.''
Investors also picked up more blue chips, which have been attractive investments due to their more stable returns and dividend payments. General Motors rose $1.16 to $35.18 and J.P. Morgan Chase advanced $1.10 to $22.62.
Brokerage house upgrades lifted other stocks. Retailer Gap rose 12 cents to $12.57 after RBC Capital Markets raised its rating to ``outperform'' from ``underperform''
Advancing issues outnumbered decliners 2 to 1 on the New York Stock Exchange. Volume came to 1.05 billion shares, ahead of 917.20 million traded at the same point Friday.
The Russell 2000 index, the barometer of smaller company stocks, rose 6.58, or 1.7 percent, to 390.03.
Overseas, France's CAC-40 gained 3.5 percent, Britain's FTSE 100 rose 3.6 percent, and Germany's DAX index soared 4.9 percent. Japan's financial markets were closed Monday for Culture Day, a national holiday.
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