- The Washington Times - Wednesday, May 15, 2002

NEW YORK (AP) Better-than-expected April retail sales pushed stocks sharply higher yesterday, extending Wall Street's winning streak to two sessions, as investors grew more confident about consumer spending. The Dow Jones Industrial Average surged nearly 190 points, its third triple-digit finish in five trading days.
Volume was also heavy, suggesting that investors were feeling more confident about stocks. But analysts were reluctant to predict the gains would last noting that recent rallies have faded.
"We're getting a nice follow-through from Monday, and it's good to see tech stocks doing well," said Ralph Acampora, director of technical research, Prudential Securities. "I'd love to say this is the beginning of something big, but that would be premature. This is a good short-term move."
The Dow finished up 188.48, or 1.9 percent, at 10,298.14, adding to a 169-point gain from Monday. It was also the highest close since April 16, a month ago, when average stood at 10,301.32.
Buying in technology stocks helped lift the Nasdaq Composite Index 66.51, or 4 percent, to 1,719.05. The Standard & Poor's 500 index was up 22.72, or 2.1 percent, at 1,097.28. Both indexes last closed higher on April 23. On Monday, the Nasdaq rallied 51, the S&P; gained 19.
The Commerce Department said retail sales rose 1.2 percent in April, the biggest increase in six months and a stronger showing than many analysts predicted. The data were the latest indications that consumer spending which accounts for two-thirds of the economy remains vigorous.
Investors were also pleased by better-than-expected quarterly results from two big retailers. Wal-Mart rose $2.35 to $57.39 on first-quarter earnings that rose 19.4 percent from a year ago. Higher-than-expected first-quarter earnings also boosted J.C. Penney up $1.69 to $24.89.
Home-improvement retailer Home Depot rose $2.36 to $47.98.
Technology stocks also fared well. Intel surged $1.63 to $30.15 after an analyst at Robertson Stephens upgraded the chip maker.
But WorldCom fell 20 cents to $1.24 on word it was being removed from the S&P; 500.
Pharmaceutical and tobacco stocks, two areas viewed as less risky but less lucrative investments, also struggled as investors shifted money into technology and other sectors. Johnson & Johnson slipped 80 cents to $61.04, while Philip Morris dropped 83 cents to $54.91.
Although the indexes have managed three significant rallies in the past week, skepticism remains. Much of the recent buying has been bargain hunting in response to weeks of selling, including the drop that followed a 305-point gain in the Dow and 122-point advance in the Nasdaq last Wednesday.
That particular rally was sparked by better-than-anticipated profits from Cisco Systems, and investor sentiment remains closely tied to individual company news.
Applied Materials shares rose sharply on Monday and yesterday in anticipation of strong earnings, and Wall Street wasn't disappointed. After the closing bell yesterday, the semiconductor-equipment maker reported second-quarter results ahead of expectations and expressed cautious optimism about the future. Applied Materials advanced $1.07 to $27.71 in extended trading, adding to a regular-session gain of $1.06.
A recovery in the semiconductor sector is seen a necessary precursor for a broader turnaround, so analysts said Applied Material's results were a possible catalyst for further gains.


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