- The Washington Times - Tuesday, October 22, 2002

NEW YORK (AP) Investors rewarded Wall Street for an upbeat earnings season again yesterday, pushing stocks sharply higher and extending two weeks of stunning gains. The market overcame an earlier round of profit-taking and saw the Dow Jones Industrial Average shoot up more than 200 points.
Analysts attributed the advance to the market's own upward momentum and to budding optimism by investors who have seen big companies such as General Motors, Citigroup and IBM beat earnings expectations. However, yesterday's batch of earnings reports was rather lackluster.
"There is a euphoria" in the market, said Brian Bruce, director of global investments, PanAgora Asset Management Inc. in Boston. "People have been waiting for something to be enthusiastic about. Today is an example of people wanting to see the glass half full."
After falling 91 points early in the session, the Dow closed up 216 points, or 2.6 percent, at 8,538. In the past eight sessions, the Dow has jumped 1,251 points 502 in the past three sessions.
The market's broader indicators were also higher, having shaken off earlier losses of their own. The Nasdaq Composite Index rose 22 points, or 1.7 percent, to 1,310. The Standard & Poor's 500 index advanced 15, or 1.7 percent, to 890.
Yesterday represented the third up day in a row for Wall Street. The gauges also were building on two straight winning weeks, their first such streak in two months. Since hitting an upward trend Oct. 9, the Dow has risen 17.2 percent. The Nasdaq has jumped 17.6 percent, and the S&P; 500 has soared 15.8 percent.
Analysts attribute the bulk of the gains to third-quarter earnings that have been surprisingly strong. Of the 215 companies in the S&P; 500 that have reported results, 61 percent have surpassed expectations, according to Thomson First Call. And 28 percent have matched estimates, while 11 percent have missed forecasts.
"We have seen some big-name companies come through and say, 'Things are slow, but earnings are coming through,'" said Kevin Caron, market strategist, Ryan, Beck & Co. LLC.
Positive earnings news and lower stock prices following weeks of selling meant the market was positioned to rally, Mr. Caron said.
But given the market's recent strides, other market watchers said stocks are due for a profit-taking sell-off.
"We had a significant run-up in a short period of time," said Alan Ackerman, executive vice president of Fahnestock & Co. "It is important for investors to know that not all rallies are created equal. Bear markets tend to see sharp rallies but more times than not, those rallies are not enough to turn sentiment around."
Investors again rewarded companies that exceeded earnings forecasts. Printer maker Lexmark rose $1.19 to $56.94 on third-quarter profits that beat analysts' expectations by a penny a share.
Diversified manufacturer 3M advanced $3.69 to $129 after meeting earnings expectations.
Last week's earnings winners also traded higher yesterday. GM rose $2.69 to $37, Citigroup climbed 54 cents to $35.52, and IBM advanced $1.30 to $75.55.
But Microsoft stumbled 64 cents to $52.51 after Chief Executive Steve Ballmer said on an Australian business-TV program that a 26 percent increase in fiscal first-quarter sales was an anomaly and that business conditions remain difficult.
Advancing issues outnumbered decliners 9 to 5 on the New York Stock Exchange. Consolidated volume was light at 1.78 billion shares, but above Friday's 1.74 billion.
The Russell 2000 index, which tracks smaller-company stocks, rose 5.26, or 1.5 percent, to 368.63.
Overseas, Japan's Nikkei stock average fell 1.2 percent yesterday. In Europe, France's CAC-40 ended flat, Britain's FTSE 100 eked out a gain of 0.1 percent and Germany's DAX index jumped 3.8 percent.

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