- The Washington Times - Friday, February 1, 2002

NEW YORK (AP) Wall Street gained momentum yesterday, surging higher for the second straight day on the Federal Reserve's positive outlook for the economy. The Dow Jones Industrial Average rose by triple digits, bringing its two-day advance to more than 300 points.
Investors are feeling more confident that business is poised to turn around after the Fed's statement on Wednesday that the economy is strengthening. Better-than-expected earnings from Procter & Gamble added to the gains, while an analyst upgrade of Intel helped technology stocks.
Still, signs of lingering caution appeared, including early selling in the tech sector.
The Dow closed up 157.14, or 1.6 percent, at 9,920.00, exceeding Wednesday's 144.62-point climb. The biggest contributor to the Dow's gain was P&G.;
The broader market also finished higher. The Nasdaq Composite Index rose 20.59, or 1.1 percent, to 1,934.03 after Wednesday's 20-point win. The Standard & Poor's 500 Index advanced 16.63, or 1.5 percent, to 1,130.20 after gaining 12 points on Wednesday.
Analysts credited much of the two-day winning streak to long-awaited signs that the economy was recovering. Investors were encouraged by news Wednesday that the economy grew at a 0.2 percent annual rate in the fourth quarter. That increase could signal that the recession ended late last year or early this year.
Yesterday also produced some good economic news as the Commerce Department reported Americans' incomes increased a solid 0.4 percent in December, after flat-lining the month before. The government also said consumer spending slipped 0.2 percent in December, but after some initial disappointment the market took that news in stride.
"What we have seen this week is that we have turned the corner. We have left the recession behind," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.
Procter & Gamble soared $3.39 to $81.68 after surpassing quarterly earnings expectations by a penny a share and reaffirming its projections for fiscal 2002. The maker of Crest and Tide, which also posted its first sales increase in a year, was the strongest Dow stock.
Another consumer products maker, Kraft Foods, climbed $1.56 to $37.06 after raising its 2002 earnings projections beyond analysts' expectations on Wednesday.
Other blue-chip gainers included Home Depot, up $1.02 at $50.09, and J.P. Morgan Chase, which rose 99 cents to $34.05.
Chip maker Intel, also a Dow industrial, gave the tech sector a lift, rising $1.18 to $35.04 after its shares were upgraded by Merrill Lynch.
Other advancers were IBM, up $2.34 at $107.89, and Oracle, which gained 64 cents to $17.26 on an upgrade from Prudential Securities.
Analysts said bargain hunting also factored into yesterday's advance as buyers took advantage of cheaper prices after a big sell-off on Tuesday, when the Dow tumbled 247.51, its biggest one-day point drop in three months. Worries about companies' accounting procedures, precipitated by the collapse of Enron, were cited as the biggest factor in that drop.
"I continue to believe that we are in a major recovery from late September lows. We have had a setback because of the Enron situation. Everyone got a bit frightened," said Al Mirman, strategist at V Finance in Sarasota, Fla.
Advancing issues outnumbered decliners 2 to 1 on the New York Stock Exchange. Consolidated volume came to 1.91 billion shares, down from Wednesday's 2.45 billion.
The Russell 2000 index, which measures the performance of smaller company stocks, rose 3.38, or 0.7 percent, to 483.10.
Overseas, markets were higher yesterday with Japan's Nikkei stock average finishing up 0.8 percent. In Europe, France's CAC-40 Britain's FT-SE 100 each and Germany's DAX index all gained 1.1 percent.

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