- The Washington Times - Monday, June 16, 2003

NEW YORK (AP) — Wall Street rode evidence of a resurgent economy to its best finish in a year yesterday. The Dow Jones industrials surged nearly 202 points, and all three major indexes posted the highest close since last summer.

Analysts said many investors were opting to jump in after Friday’s moderate decline in anticipation of stronger profit growth. Mutual fund managers, in particular, want to take advantage for fear of missing the next big rally.

“The people have been buying the dips,” said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. “The New York index came in above expectations, and there was an upgrade of Yahoo that’s encouraging people.”

The Dow closed up 201.84, or 2.2 percent, at 9,318.96, after a weekly advance of 0.6 percent. It was the Dow’s largest one-day gain since April 2, when the blue chips closed 215.20 points higher. On Friday, the blue chips lost 79 points.

The Dow stands at its highest close since it reached 9,379.50 on July 5, 2002.

The broader market also finished sharply higher. The Nasdaq Composite Index advanced 40.09, or 2.5 percent, to 1,666.58, after slipping 0.1 percent last week. The Nasdaq is at its highest close since May 23, 2002, when it reached 1,697.63.

The Standard & Poor’s 500 index rose 22.13, or 2.2 percent, to 1,010.74, having risen 0.1 percent last week. It was also the index’s strongest advance since April 2, when the S&P; closed 22.42 points higher. The index is at its highest close since June 19, 2002, when it stood at 1,019.99.

The Federal Reserve Bank of New York said its general business conditions index for June rose to 26.80, the highest level on record, from 10.60 in May, according to Dow Jones Newswires. The reading boosted hope of a strong reading for the Philadelphia regional index, which is seen as an indicator of national manufacturing activity.

Stocks have rallied for three months as investors bet on an economic recovery by year’s end. Some analysts believe the market is firmly in an upward trend, although others believe stocks are due for a major pullback after advancing so quickly.

Since hitting a low for the year March 11, the Dow is up about 24 percent, the Nasdaq up 31 percent and the S&P; up 26 percent.

“The market is a bit overbought and has been for a few weeks now,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “However, it appears the path of least resistance is higher for the moment. … As long as the economic news continues to gradually improve, it seems like equity prices most likely have further upside in the next six to 12 months.”

All 30 stocks making up the Dow Jones industrials advanced, including Boeing, which increased $1.07 to $36.41 after the airline manufacturer said it expected a $5.2 trillion market for new aviation services over the next 20 years.

General Electric, another Dow component, rose 69 cents to $31.34 after it reached a tentative four-year agreement with two of its unions.

Yahoo gained $1.94 to $30.66 after Soundview Technology raised the Internet company’s stock rating to “outperform” from “neutral.”

Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange, where volume was moderate at 1.30 billion shares.

, compared with 1.27 billion traded Friday.

The Russell 2000 index, a barometer of smaller-company stocks, rose 7.76, or 1.7 percent, to 457.47.

Overseas, Japan’s Nikkei stock average finished 1.6 percent lower yesterday. In Europe, France’s CAC-40 advanced 2.1 percent, Britain’s FTSE 100 rose 0.5 percent and Germany’s DAX index climbed 3 percent.

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