- The Washington Times - Thursday, February 21, 2002

NEW YORK (AP) Bargain hunting gave the stock market a generous boost yesterday as investors took advantage of lower prices after a two-day sell-off and sent the Dow Jones Industrial Average up nearly 200 points.
Investors traded more cautiously in the tech sector, however, troubled by reports of improper accounting at Computer Associates.
The Dow rose 196.03, or 2.0 percent, to close at 9,941.17, partly recovering from a drop of 256.85 in the previous two sessions.
The Nasdaq Composite Index lagged behind the Dow for much of the day, but in a late surge gained 24.96, or 1.4 percent, to finish at 1,775.57. The Standard & Poor's 500 Index rose 14.64, or 1.4 percent, to 1,097.98.
Depressed prices, not hopes for the economy, have served as the only catalyst for buying on Wall Street for several weeks. Trading so far this year has largely been dominated by selling on fears about poor business, earnings and corporate bookkeeping in the wake of Enron's collapse.
"The market appears to be one where we are seeing lots of rallies, lots of sell-offs," said Alan Ackerman, executive vice president of Fahnestock & Co. "There's little conviction and little leadership needed to get the market going."
Many of the market's gains also grew out of short covering as investors who bet prices were headed lower were forced to buy stocks to cover their positions. The prevalence of shorts in the market is another sign of investors' lingering pessimism.
"We're beaten up pretty good. So, every now and then, we lift up. But the only thing that allows the market to move up a bit is short [investors] cover and bargain hunters step in, but then it fades," said Larry Wachtel, market analyst for Prudential Securities.
Accounting concerns again plagued Wall Street yesterday. Computer Associates plunged 17.4 percent, down $4.40 to $20.91, on reports in Newsday and the New York Times that federal prosecutors are investigating whether the company deliberately overstated sales and profits to inflate its stock price.
IBM, which fell in recent sessions on reports about its accounting, slipped another 23 cents to $99.31.
But Wall Street's lower prices helped the market at least temporarily set aside its accounting worries. Half of the Dow's 30 stocks were up more than $1, with the biggest advance coming from 3M, up $3.73 at $117.10.
Dow industrial DuPont gained 82 cents to $46.33 on an upgrade, to "strong buy" from "market perform" by Deutsche Banc Alex. Brown.
Analysts' upgrades helped other stocks, and gave investors hope that some businesses are poised to turn around. Circuit City climbed $2.21 to $24.32 after Merrill Lynch raised its near- and long-term recommendations to "strong buy" from "buy."
Oracle rose 72 cents to $15.51 after Banc of America upgraded the software maker to "buy" from "market perform."
Market analysts don't expect Enron to be a long-term drag on Wall Street, and still believe business will recover in the second half of 2002.
"In the short term, we do have a lot of uncertainties. You have all the accounting issues out there that will spook investors. And, all depending on what company reports [earnings or outlook] today, people get lifted up or very dejected," said Rafael Tamargo, director of equity research at Wilmington Trust. "But the odds are for upside, not downside. We have already had the slowdown."
The market was barely swayed by a report that consumer inflation inched up 0.2 percent in January, after dipping 0.1 percent in December.
As the recession approaches its one-year anniversary next month, investors and analysts likely believed the uptick in the Labor Department's Consumer Price Index was an indication that the economy is strengthening.

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