- The Washington Times - Wednesday, April 17, 2002

NEW YORK (AP) Wall Street got the dose of good news it had been longing for yesterday: better-than-expected earnings, and from two big companies, General Motors and Texas Instruments. Stocks surged the Dow industrials up more than 200 points and the Nasdaq Composite Index up better than 3 percent as investors' faith was renewed in an economic turnaround.

"The market is reflecting a better feeling about tech stocks and is also benefiting from strength in GM," said Alan Ackerman, executive vice president of Fahnestock & Co., although he warned that the market's enthusiasm likely won't last as more companies report first-quarter results, some of which are bound to disappoint.

"The market is prone to almost unpredictable swings from day to day," Mr. Ackerman said.

But results from Dow industrial Intel, released after the close of regular trading yesterday, were likely to extend Wall Street's upbeat mood. Intel met analyst expectations, and its stock rose in after-hours trading.

The Dow Jones Industrial Average closed up 207.65, or 2.1 percent, at 10,301.32. It was the Dow's biggest one-day point gain since March 4, when the blue chips rose 217.96.

The past two sessions illustrate Mr. Ackerman's point about large fluctuations on Monday, the Dow fell 97.15 to its lowest close since Feb. 22.

The market's broader indicators also rose sharply. The tech-focused Nasdaq climbed 63.01, or 3.6 percent, to 1,816.79 on Texas Instruments' profits. The Standard & Poor's 500 Index gained 25.82, or 2.3 percent, to 1,128.37.

GM, the strongest Dow industrial yesterday, rose $2.95 to $64.05 after reporting first-quarter profits of $1.39 a share, 25 cents higher than analysts had forecast. GM also raised its full-year earnings estimate, a sign that GM believes consumer spending, which accounts for two-thirds of the economy, will continue to strengthen.

Texas Instruments climbed $1.66 to $33.79, having reported earnings late Monday of a penny a share, beating Wall Street's break-even estimates. The firm also said orders rose and that it has turned the corner in the semiconductor slump.

"We think we can say goodbye to the bottom," said Ron Slaymaker, the company's manager of investor relations.

Intel rose $1.40 to $29.51 on Texas Instruments' good news and ahead of its own earnings, released at the end of the day. Later, when Intel reported first-quarter profits that met analysts' expectations, the chip-maker rose $1.49 in the extended trading session.

Wall Street welcomed yesterday's string of stronger-than-expected earnings after mixed reports from Eli Lilly and Citigroup on Monday, General Electric on Friday, and last week's earnings and revenue warning from IBM.

Other gainers included Johnson & Johnson, up $1.10 at $63.26 on better-than-expected results.

Despite yesterday's surge, analysts cautioned that the market remains vulnerable to earnings that will be released this month. As recent proof, they point to last Thursday's session, when the Dow industrials dropped 205.65 on rumors of IBM's warning.

Analysts are also dubious of technology's ability to maintain an upturn, because capital spending continues to be soft in high-tech sectors and because investors could try to recoup losses as stocks advance.

"You have to figure that the get-me-out-even syndrome is going to kick in as [techs] rally, and that is going to limit any rally," said Richard A. Dickson, technical analyst at Hilliard Lyons in Louisville, Ky.

Advancing issues outnumbered decliners slightly more than 2 to 1 on the New York Stock Exchange.

Volume totaled 1.34 billion shares, ahead of Monday's 1.11 billion.

The Russell 2000 index, the barometer of smaller-company stocks, rose 10.21, or 2 percent, to 522.95.

Overseas, markets were higher yesterday. Japan's Nikkei stock average and Germany's DAX index each gained 1.9 percent, France's CAC-40 climbed 2.1 percent, and Britain's FT-SE 100 rose 1.1 percent.

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