- The Washington Times - Wednesday, December 19, 2001

NEW YORK (AP) The latest round of evidence to support a long-awaited economic recovery namely a strong jump in November housing construction sent stocks soaring yesterday, propelling the Dow Jones Industrial Average up by triple digits.
Better-than-expected earnings from electronics retailers Best Buy and Circuit City also contributed to the market's advance. Combined with the housing report, the news improved investors' outlook for the economy, two-thirds of which is made up of consumer spending.
"There are a lot of reasons to be optimistic," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. Among them, he said, are the year's 11 interest-rate cuts and companies' improved earnings results and projections.
The Dow closed up 106.42, or 1.1 percent, at 9,998.39, after gaining 80 points Monday.
The broader market also advanced sharply. The Nasdaq Composite Index rose 17.31, or 0.9 percent, to 2,004.76. Throughout this month, the Dow and Nasdaq have traded just above and below 10,000 and 2,000, respectively, and until December had not risen above those marks since before the September 11 terror attacks.
Wall Street's broadest measure, the Standard & Poor's 500 Index gained 8.56 to 1,142.92.
Investors, who have been looking for evidence of an economic recovery, welcomed the Commerce Department's report that housing construction rose 8.2 percent in November. The increase was bigger than analysts were expecting and brought housing starts to their highest level since July as builders bet that low mortgage rates would continue to attract buyers.
Home builders posted gains, led by Lennar, which soared $2.75 to $44. Lennar said its fourth-quarter earnings estimates will exceed Wall Street's forecast by 25 percent.
Other winners included Best Buy, which rose $3.55 to $72.55 on fiscal third-quarter earnings that were 40 percent higher than the same period last year and beat analysts' expectations by a penny a share. Competitor Circuit City, which also posted better-than-expected profits, inched up 16 cents to $23.86.
Also on the upside, General Electric rose $1.42 to $39.72, having reaffirmed late Monday its fourth-quarter and 2001 earnings expectations. DuPont advanced $1.10 to $43.22 after an upgrade by Merrill Lynch.
In technology, IBM gained 86 cents to $122.20, while Ciena rose 56 cents to $15.47.
"There are some great companies that are available at great discounts compared to where they were a year ago," Mr. Lydon said.
Analysts said the buying was also attributable to the likelihood that companies will have an easy time posting improved profits over this year, which marked the worst profit decline since 1991.

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