- The Washington Times - Thursday, August 15, 2002

NEW YORK (AP) Investors' relief over companies' willingness to stand by their financial statements yesterday sparked a late-day rally on Wall Street, sending the Dow Jones Industrial Average soaring 260 points.
The market's advance reversed an earlier sell-off as investors waited to see whether businesses would comply with an end-of-business-day deadline. As the session wore on, analysts said investors began to feel more confident in companies' ability to certify their results.
"There is just a certain amount of relief that the signatures were coming in," said Tony Cecin, director of institutional trading at US Bancorp Piper Jaffray.
The Dow rose 260.92, or 3.1 percent, to 8,743.31, after falling as much as 129 points earlier in the session. The finish allowed the blue-chip index to more than recover from Tuesday's 207-point loss.
The broader market was also sharply higher. The Nasdaq Composite Index gained 65.02, or 5.1 percent, to 1,334.30, following Tuesday's loss of 37.52. The Standard & Poor's 500 index rose 35.41, or 4 percent, to 919.62, after falling 19.58 points the day before.
Yesterday's late rally was in keeping with recent sessions that have seen big rallies or sell-offs emerge in the final hour or so of trading. Tuesday's big sell-off accelerated in the last hour a reflection perhaps of momentum trading as investors see the market headed in one direction and react.
Another factor was bargain hunting following Tuesday's declines, which were prompted by the Federal Reserve's decision not to lower interest rates.
Technical factors, such as traders trying to make a quick profit once the markets turned upward, also contributed to the rush of buying, analysts said.
"It just seems like the selling ran out of steam. Once it turned higher, you had short-term traders hop in on the long side," said Richard A. Dickson, technical analyst for Hilliard Lyons in Louisville, Ky. "It's just more of the volatility that we have been seeing."
Earlier in the session, analysts worried that a delay by many companies could prompt a sell-off by jittery investors. But by midafternoon, hundreds of companies had certified their results, with few restatements.
The advance was widespread, including some companies that announced they would have to restate past earnings along with firms that posted weaker-than-expected results. Household International, which will restate results, rose 29 cents to $38.09.
And Applied Materials rose 96 cents to $14.42 despite reporting that third-quarter orders were weaker than anticipated.
But earnings disappointments pulled down other issues. Vivendi, which posted a big first-half loss and announced it would sell $9.8 billion in assets including U.S. publisher Houghton Mifflin, declined $3.67, or 23.9 percent, to $11.66.
Wall Street appeared to be little affected by an economic report released yesterday by the Commerce Department showing that businesses increased their inventories in June by $1.1 trillion, or 0.2 percent. The report, which was slightly ahead of analysts' expectations, offered a sign that companies may be more optimistic about the economy's prospects.
Advancing issues outnumbered decliners 3 to 1 on the New York Stock Exchange. Volume totaled 1.49 billion shares, up from 1.29 billion in Tuesday's session.
The Russell 2000 index, which tracks smaller-company stocks, rose 11.65, or 3.08 percent, to 389.41.
Overseas, Japan's Nikkei stock average closed down 0.5 percent. In Europe, France's CAC-40 fell 4.4 percent, Britain's FTSE 100 declined 2.4 percent and Germany's DAX index fell 2.5 percent.

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