- The Washington Times - Wednesday, April 23, 2003

NEW YORK (AP) Investors yesterday sent the Nasdaq Composite and Standard & Poor's 500 indexes to their highest levels in three months after better-than-expected earnings boosted optimism that corporate profits are improving.
Analysts said investors also were reassured by President Bush's comments indicating that Federal Reserve Chairman Alan Greenspan is likely to be reappointed.
"If one pulls the camera back and sees the magnitude of growth and earnings reported thus far, it's relatively impressive against the backdrop of an economy that had effectively stalled while waiting for Operation Iraqi Freedom," said Charles G. Crane, strategist for Victory SBSF Capital Management.
The Nasdaq advanced 26.99, or 1.9 percent, to 1,451.36, the highest since Jan. 14, when it closed at 1,460.99. The S&P; 500 index gained 19.36, or 2.2 percent, to 911.37, the best level since Jan. 16, when it finished at 914.60.
The Dow Jones Industrial Average, meanwhile, closed up 156.09, or 1.9 percent, at 8,484.99. It was the average's highest finish since March 21, when the blue chips closed at 8,521.97.
Investors have been monitoring the earnings news this week as they await reports due Friday on the gross domestic product and on consumer confidence. Analysts say investors are looking for clear signs that the economy will rebound by year's end.
"What we're seeing is hope and expectations building for the second half of the year," said John Caldwell, chief equity strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.
But he added, "We just hope to caution that we're looking at a modest growth rate. … Companies are reporting earnings that beat already-lowered expectations, and we're not seeing a whole lot of guidance for future periods."
Everest Re climbed $10.25, or 16.7 percent, to $71.70 after the reinsurer posted a jump in quarterly earnings and raised its earnings estimate for the year, noting improved conditions in the casualty market. The results boosted other insurance companies, including American International Group, which rose $2.41 to $56.91.
Lockheed Martin rose $3.30 to $48.55 after the defense contractor posted quarterly profits that beat analysts' expectations. It also raised its outlook for the year. The results boosted other defense stocks.
News of Mr. Greenspan's likely reappointment also gave stocks a lift. Mr. Bush said in an interview that Mr. Greenspan, 77, "should get another term" when his current one expires in June next year. The Fed chairman is nominated by the president and must be confirmed by the Senate.
"I think this is good news to most investors," Mr. Crane said. "I don't know if Mr. Greenspan wants the job, but he's very well-respected. To get an endorsement is better than a sharp stick in the eye."
Eli Lilly rose $1.82 to $61.29 after the pharmaceutical company posted quarterly income that came in 3 cents higher than analysts had expected.
Kimberly Clark gained $2.65 to $49.90 after the maker of Kleenex and Huggies diapers reported first-quarter profits that beat expectations by 3 cents per share. It also reaffirmed its full-year outlook.
Decliners included Sprint FON Group, which fell 59 cents to $10.68, after the telecommunications company reported quarterly earnings that missed estimates by a penny per share. It also lowered its full-year outlook.
Advancing issues outnumbered decliners 3-to-1 on the New York Stock Exchange. Volume was moderate at 1.63 billion shares, compared with 1.12 billion Monday.
The Russell 2000 Index, which tracks smaller-company stocks, rose 5.86, or 1.5 percent, to 391.16.

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