- The Washington Times - Thursday, November 15, 2001

NEW YORK (AP) A record jump in retail sales and better-than-expected earnings by Hewlett-Packard sent stocks higher yesterday for the second straight session.
After weeks of rallying, the Dow Jones industrials are now halfway between the 9,605 level held before the September 11 terrorist attacks and 10,000.
"Retail sales were fabulous. Everyone loved that. It's positive economic news, and we haven't had enough of that," said Arthur Hogan, chief market analyst at Jefferies & Co.
The Dow Jones Industrial Average closed up 72.66, or 0.8 percent, at 9,823.61, adding to a 196-point gain Tuesday.
The market's broader indicators were also higher, after dipping occasionally into negative territory. The Nasdaq Composite Index advanced 11.08, or 0.6 percent, to 1,903.19, and the Standard & Poor's 500 Index gained 2.12, or 0.2 percent, to 1,141.21.
Investors were enthusiastic yesterday about a 7.1 percent jump in retail sales in October, the biggest one-month gain ever and a sharp contrast to the 2.2 percent dip in September sales. The Commerce Department's report boosted hopes for an economic turnaround in 2002, because consumer spending accounts for two-thirds of the nation's economy.
"To see the consumer turn around that way is a positive for the economy," Mr. Hogan said.
Much of the strength in October's retail sales came from a record 26.4 percent increase in car sales, which have been lifted by such incentives as zero percent financing. Automakers benefited yesterday on Wall Street with General Motors gaining $1.04 to $46.03 and DaimlerChrysler advancing 92 cents to $38.55.
A string of stronger-than-anticipated earnings from retailers also pulled up the market. Among those issues, Federated Department Stores climbed $2.28 to $37.11, Payless ShoeSource advanced $1.61 to $57.76 and Tiffany rose $1.65 to $28.35.
Investors also rewarded Internet retailer Amazon.com, which surged 30 percent, up $2.20 at $9.49.
Good news from Hewlett-Packard contributed to yesterday's gains, as well. The Dow industrial soared 9 percent, up $1.85 at $22.08, after surpassing analysts' earnings forecasts by 11 cents a share.
HP Chairman and Chief Executive Carly Fiorina said the company managed inventory aggressively and lowered expenses to deal with the economic slowdown.
But investors were wary about the ability of some tech issues to hold on to recent gains. IBM fell $2.35 to $114.35 ahead of its late-day meeting with analysts. At the meeting, IBM said there is a lot of potential in Internet-related business, but did not discuss earnings. IBM inched up 3 cents in extended-hours trading.
Applied Materials slipped 9 cents to $40.71, before releasing fiscal fourth-quarter earnings after the market closed. The world's largest supplier to the semiconductor industry missed earnings expectations by a penny a share, but said the outlook for the industry is strong. In the extended session, Applied Materials fell $1.64.
The market has advanced on investors' increasing confidence that the economy will recover next year. That upbeat attitude helped the Dow on Friday to recoup the 1,369 points lost in the first week of trading after the attacks. And, the blue-chip index is moving closer to 10,000, a level it hasn't closed at since Sept. 5, when it stood at 10,033.27.
Throughout yesterday, much of the market flirted with negative territory as investors secured profits from the recent rallies. Analysts called the profit-taking a natural strategy given the run-up.


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