- The Washington Times - Friday, August 16, 2002

NEW YORK (AP) A late surge of buying lifted Wall Street to its second-straight winning session yesterday, despite more disappointing economic news and profit-taking after the market's huge rally. The Dow Jones Industrial Average had its best close in more than five weeks.

The gains came gradually, however, and solidified only in the final hour of trading. Analysts said investors, still wary after two years of bear markets, remained hesitant about making many big moves.

The Dow closed up 74.83, or 0.9 percent, at 8,818.14, for a two-day advance of 335.75. It was the average's highest close since July 9, when the Dow stood at 9,096.09.

Broader stock indicators also rose. The Standard & Poor's 500 Index advanced 10.63, or 1.2 percent, to 930.25, while the Nasdaq Composite Index gained 10.71, or 0.8 percent, to 1,345.01.

The advance came a day after a sizable rally on news that most of the nation's largest companies had complied with the Securities and Exchange Commission deadline to certify their financial statements.

Investors appeared reassured by the relative ease of the process, but analysts were hesitant to ascribe too much to the market's two-day winning streak. They said that although investor sentiment had improved from a few months ago, market conditions remain fragile.

"There is still a very reasonable negative case to be made against equities starting with valuation, continuing on to the risk of a prolonged period of economic softness and the risk that we may even be heading into a deflationary period of time that's typically corrosive to profits," said Charles G. Crane, strategist for Victory SBSF Capital Management.

Indeed, the Labor Department reported yesterday new claims for jobless benefits rose last week by a seasonally adjusted 6,000 to 388,000, a bigger-than-expected gain. Economists expect the jobless rate to move higher later this year as cautious employers put off new hires.

A Federal Reserve study found that the nation's industrial sector lagged in July, with production increasing by 0.2 percent a slowdown from the brisk 0.7 percent increase posted in June. A separate regional survey from the Philadelphia Federal Reserve showed a drop-off in spending and manufacturing activity.

"There's little doubt there is economic weakness," said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum. "The only unknown is if this is going to turn into a double-dip recession. There's no answer to that yet."

Still, investors felt confident enough about the market's prospects to do some selective buying.

In yesterday's trading, Target advanced $2.93, or 9.1 percent, to $35.10 on a 27 percent increase in second-quarter earnings. Nordstrom surged $2.18, or 11.8 percent, to $20.62 on better-than-expected quarterly results.

Brocade Communications was also higher, climbing 91 cents to $15.96, after reporting growth in quarterly profits and sales and expressing confidence about the current quarter.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide