Stocks gain on bargain-hunting
NEW YORK (AP) – Bargain hunting extended Wall Street’s rally to a second session Tuesday, lifting stocks to their highest level in two weeks. Investors were also encouraged by some positive corporate news. Analysts said many investors were willing to buy on bets that a war with Iraq might not be imminent after all. News that the terror alert warning might be lowered soon also contributed to the advance.
“We’re primarily having a technical bounce from an oversold condition,” said Todd Clark, head of listed equity trading at Wells Fargo Securities. But he added there still remains too much uncertainty about a war with Iraq to allow for a continued advance.
“We’re probably going to be pulling back a little bit. There’s still fog in the horizon,” Clark said.
The Dow climbed 132.35, or 1.7 percent, to close at 8,041.15, having gained 0.6 percent last week to snap a four-week losing streak. It was the highest level since Feb. 3, when blue chips closed at 8,109.82. Financial markets were closed Monday for the Presidents Day holiday.
The broader market also finished sharply higher. The Nasdaq composite index rose 36.37, or 2.8 percent, to 1,346.54, after climbing 2.2 percent last week. The gain pushed the tech-focused index 0.8 percent higher for the year to its highest close since Jan. 29.
The Standard & Poor’s 500 index gained 16.28, or 2 percent, to 851.17, following a weekly advance of 0.6 percent. It was the highest finish since Feb. 3.
Heinz climbed 37 cents to $31.65 after the food maker reaffirmed its fiscal 2003 forecast.
Investors appeared to be less anxious that a war would begin soon with Iraq after Saddam Hussein’s government agreed to allow an American U-2 plane to fly over its territory as part of the U.N. weapons inspection of the country. A majority of Security Council members led by France have resisted an immediate war and called for inspections to continue.
Concerns about war and its effect on the U.S. economy killed the market’s New Year’s rally and sliced 1,000 points off the Dow industrials in recent weeks.
Meanwhile, over the weekend, Homeland Security Secretary Tom Ridge said the current terrorism threat level will likely be lowered from its current high-risk, or orange, status sometime in the future.
Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange. Consolidated volume was very light at 1.52 billion shares, compared with 1.68 billion traded Friday.
The Russell 2000 index, which tracks smaller company stocks, rose 6.03, or 1.7 percent, to 364.53.
Overseas, Japan’s Nikkei stock average finished 0.9 percent lower Tuesday. In Europe, France’s CAC-40 rose 2 percent, Britain’s FTSE 100 gained 1 percent and Germany’s DAX index advanced 1.2 percent.
___
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com