- The Washington Times - Thursday, November 21, 2002

NEW YORK (AP) Investors set aside concerns about a plunge in housing construction yesterday and sent stocks sharply higher as they focused on a growing sense that the economic recovery was gathering momentum. The Dow Jones Industrial Average rose nearly 150 points, while the Nasdaq Composite Index climbed more than 40.
Wall Street initially was concerned that the drop in housing starts indicated that one of the economy's strongest sectors was beginning to falter. But the market recovered from early declines and more than made up for a previous two-day sell-off.
Analysts say Wall Street is somewhat immune to bad news right now because investors want to buy stocks during what traditionally has been the strongest time of year for the market.
"We are in the season when stocks do better. The November-December-January period is typically the one when people become more optimistic about the coming year and they become more aggressive in buying stocks," said Bill Barker, investment strategy consultant at RBC Dain Rauscher in Dallas.
The Dow closed up 148.23, or 1.8 percent, at 8,623.01, more than wiping out its previous two-day loss of 104.31.
The broader market also advanced. The Nasdaq rose 44.84, or 3.3 percent, to 1,419.35. The Standard & Poor's 500 index gained 17.41, or 1.9 percent, to 914.15.
"We are in a bit of a grace period right now. Clearly, the psychology of the marketplace is positive. And, people are concerned about getting left behind right now," said Brian Bush, director of equity research at Stephens Inc.
The Commerce Department reported new housing construction fell by 11.4 percent in October, the biggest drop since 1994 and a weaker number than analysts expected.
The report followed a profit warning Tuesday from Home Depot. The two developments raised questions about housing and consumer spending, which have been the two brighter spots in the economy during the bear market.
But the concerns weren't enough to derail Wall Street's upward momentum, which analysts attributed to better-than-expected third-quarter earnings and the growing belief that earnings and the economy would be stronger in 2003.
Mutual fund portfolio managers are among Wall Street's big buyers right now, because they don't want to miss out on a fourth-quarter rally, analysts said. So far this quarter, the Dow has gained nearly 14 percent, the Nasdaq has climbed 21 percent and the S&P; has risen 12 percent.
"They are putting money to work because they have to. They are beginning to feel the pressure of performance on this quarter," Mr. Barker said.
Yesterday, the market was strong across sectors.
Dow industrial International Paper rose 54 cents to $35.76 on an upgrade from CIBC World Markets.
Maytag jumped $2.61 to $27.40 after backing its 2002 earnings outlook and setting revenue growth goals of 7 percent to 10 percent for next year, and Hewlett-Packard advanced 30 cents to $17.01.


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