- The Washington Times - Wednesday, February 19, 2003

NEW YORK (AP) Bargain hunting extended Wall Street's rally to a second session yesterday, lifting stocks to their highest level in two weeks. Investors also were encouraged by some positive corporate news.
Analysts said many investors were willing to buy on bets that a war with Iraq might not be imminent after all. News that the terror alert warning might be lowered soon also contributed to the advance.
"We're primarily having a technical bounce from an oversold condition," said Todd Clark, head of listed equity trading at Wells Fargo Securities. But he added that too much uncertainty about a war with Iraq remained to allow for a continued advance.
"We're probably going to be pulling back a little bit. There's still fog in the horizon," Mr. Clark said.
The Dow Jones Industrial Average climbed 132.35, or 1.7 percent, to close at 8,041.15, having gained 0.6 percent last week to snap a four-week losing streak. It was the highest level since Feb. 3, when blue chips closed at 8,109.82. Financial markets were closed Monday for the Presidents Day holiday.
The broader market also finished sharply higher. The Nasdaq Composite Index rose 36.37, or 2.8 percent, to 1,346.54, after climbing 2.2 percent last week. The gain pushed the tech-focused index 0.8 percent higher for the year to its highest close since Jan. 29.
The Standard & Poor's 500 index gained 16.28, or 2 percent, to 851.17, after a weekly advance of 0.6 percent. It was the highest finish since Feb. 3.
Heinz climbed 37 cents to $31.65 after the food maker reaffirmed its fiscal 2003 forecast.
Investors appeared to be less anxious that a war would begin soon with Iraq after Saddam Hussein's government agreed to allow an American U-2 plane to fly over its territory as part of the U.N. weapons inspection of the country. A majority of Security Council members led by France have resisted an immediate war and called for inspections to continue.
Concerns about war and its effect on the U.S. economy killed the market's New Year's rally and sliced 1,000 points off the Dow industrials in recent weeks.
Meanwhile, over the weekend, Homeland Security Secretary Tom Ridge said the terrorism threat level likely will be lowered from its current high-risk status, Code Orange.
"I do believe the war scenario has already been discounted in the market," said Mark Donahoe, managing director at US Bancorp Piper Jaffray in Minneapolis, adding that he believes "it's not a question of 'if,' it's just 'when.'"
Stephen Massocca, president of Pacific Growth Equities, said he believed the fact that war seemed less immediate allowed investors to realize that the economy wasn't doing too badly.
"We had some decent economic numbers coming out last week that was digested over the weekend on industrial production and unemployment claims," he said. "That, in combination with the market in an oversold state, set up" a rally.

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