- The Washington Times - Thursday, October 24, 2002

NEW YORK (AP) Wall Street managed a modest advance yesterday, rising for a fourth time in five days as investors weighed a mixed economic assessment from the Federal Reserve against disappointing earnings from Eli Lilly.
Analysts were expecting some declines on profit-taking following two weeks of strong gains. But many investors remain optimistic that the market could sustain a real upward trend, since earnings news have largely been stronger than expected, they said.
"The market is really just digesting the huge bounce we have had," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "We had a little bit of an excuse for profit-taking, among them were Eli Lilly's guidance. But it really just appears to be healthy consolidation."
The Dow Jones Industrial Average rose 44.11, or 0.5 percent, to close at 8,494.27, having dropped 88 points Tuesday. Earlier in the day, blue-chip stocks fell as much as 155 points before recovering their losses.
The broader market also finished higher. The Nasdaq Composite Index rose 27.43, or 2.1 percent, to 1,320.23, after declining as much as 13 points. It was the highest close for the tech-focused index since Aug. 29, when the Nasdaq stood at 1,335.77.
The Standard & Poor's 500 Index gained 5.98, or 0.7 percent, to 896.14.
Eli Lilly reported a 20 percent rise in earnings, meeting analysts' expectations, but the drug maker lowered its fourth-quarter outlook, citing added costs for its newer drugs. The company's shares fell $4.91 to $58.09.
The market, however, got a boost following some mixed comments from the Federal Reserve.
In its survey of regional economic conditions, the Fed reported a sluggish economy, citing problems of weak retail sales and a soft job market. The survey fostered some hope of another interest-rate cut when the Fed meets Nov. 6.
Fed Chairman Alan Greenspan said separately that Americans' productivity should continue to grow in the coming years, although not as strong as this year's surge.
Analysts say investors have been more hopeful in the wake of the two-week rally prompted by better-than-expected earnings from companies such as General Motors and IBM. Since Oct. 9, when the Dow hit a five-year low, the blue chips have gained about 1,200 points.
"The earnings season is continuing at the same pace as before, with two-thirds doing better than expected. That's been comforting to investors generally," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co.
Despite some declines owing to profit-taking, he added, "I'm of the opinion we will continue to build to higher highs based on the fact the fear of a double-dip recession is waning, and the economic environment looks more reassuring."

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