- The Washington Times - Saturday, March 15, 2003

NEW YORK (AP) Momentum from Wall Street's big rally spilled over to yesterday's session, lifting most stocks for a third straight day and helping the market snap a two-week losing streak.
But investors exhibited some caution, not surprising after Thursday's gains. They were the best the market had seen in five months. While investors are more confident that a U.S. war with Iraq would be short and successful, they were wary of making further commitments before the weekend.
Analysts were impressed that Wall Street added to its rally, a sign of strength rarely seen in market beaten down by a tepid economic recovery and war jitters. But yesterday's gains were a struggle and the market had to fight off earlier declines.
"Normally, you would expect some profit taking after a big run like yesterday. … But you have to be pretty encouraged that the market is holding up pretty well," said John Caldwell, chief equity strategist for McDonald Financial Group, part of Cleveland-based KeyCorp.
The Dow Jones Industrial Average closed up 37.96, or 0.5 percent, at 7,859.71, having surged 269.68 Thursday in its biggest one-day advance since Oct. 15. In three session, the Dow has gained 335.79.
The broader market was narrowly mixed. The Nasdaq Composite Index slipped 0.44, or 0.03 percent, to 1,340.33, following Thursday's advance of 61.53, also its best one-day climb since Oct. 15. The Standard & Poor's 500 index rose 1.37, or 0.2 percent, to 833.27, after gaining 27.71 on Thursday, its second-best day of 2003.
Trending higher since Wednesday, the market's gauges were able to break a two-week losing streak. For the week, the Dow rose 1.6 percent, the Nasdaq climbed 2.7 percent and the S&P; advanced 0.5 percent.
Analysts attributed this week's advances to investor hopes that a war would be short and the United States would win. But they are dubious of the market's ability to truly forge an upward path as long as there is uncertainty about Iraq.
"We saw a huge run-up [Thursday], and the situation in the Middle East is still very cloudy," said Lynn Reaser, chief economist and senior market strategist at Banc of America Capital Management. "At this point, it is certainly premature to see any kind of sustained rally."
Analysts said the market was unmoved by disappointing economic news, this time on inflation and business inventories. Investors are more preoccupied by war developments, as seen by Thursday's rally. It came despite weaker-than-expected retail sales for February.
Yesterday, the Labor Department reported inflation at the wholesale level, as measured by the Producer Price Index, jumped 1 percent in February as energy prices surged by the largest amount since the buildup to the Persian Gulf war 12 years ago. Last month's increase followed a 1.6 percent rise in January, which had been the biggest one-month gain in 13 years.
Separately, the Commerce Department said business inventories grew for a ninth straight month in January, rising by 0.2 percent, but the pace of inventory building slowed, indicating that companies are wary about restocking.
Corning rose 19 cents to $5.89 after UBS Warburg upgraded the fiber-optics maker to "buy."
Software maker Adobe climbed $2.27 to $30.79 on fiscal first-quarter profits that topped analysts' expectations by 3 cents a share.
Oracle, which also makes software, inched up a penny to $11.94 despite a downgrade to "neutral" from Fulcrum.
Advancing issues outnumbered decliners nearly 4 to 3 on the New York Stock Exchange. Trading volume was moderate at 1.52 billion shares, compared with Thursday's 1.76 billion.
The Russell 2000 index, the barometer of smaller-company stocks, fell 1.05, or 0.3 percent, to 354.39.
Overseas, Japan's Nikkei stock average finished yesterday up 1.7 percent. In Europe, France's CAC-40 surged 7.3 percent, Britain's FTSE 100 rose 3.3 percent and Germany's DAX index gained 2.1 percent.

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