- The Washington Times - Monday, May 12, 2003

NEW YORK (AP) — Wall Street regained its momentum yesterday after upbeat outlooks from companies such as Intel and Nvidia motivated investors to buy after two days of declines. The Dow Jones Industrial Average climbed 113 points.

Analysts said the positive outlook buoyed investors who were worried about a stumbling economy in the later part of the year and gave the Nasdaq Composite and Standard & Poor’s 500 indexes their fourth straight winning week.

“When you have industry leaders saying they think there will be a slight recovery in the PC market, there’s a whole domino effect with software companies and chip companies doing better,” said Tim Smalls, managing director at SG Cowen Securities.

“That’s the area where you have to get the market moving — through capital expenditures on the corporate side,” he added. “Unless we get that, we’ll drift lower.”

The Dow closed up 113.38, or 1.3 percent, at 8,604.60, more than erasing a two-day loss of 97 points. It was the highest level seen since Jan. 16, when the blue chips finished at 8,697.87.

The broader market also finished higher. The Nasdaq gained 30.46, or 2 percent, to 1,520.15. The S&P; rose 13.14, or 1.4 percent, to 933.41.

For the week, the three main gauges finished higher, with the Dow up 0.3 percent, the Nasdaq higher 1.2 percent, and S&P; up 0.4 percent. The Dow posted its second straight winning week.

Dow component Intel rose 71 cents to $19.58 after the technology giant said it sees signs of an industry turnaround later this year, citing growth in the key China market.

Nvidia surged $5.31, or 33.1 percent, to $21.37 after the chip maker reported quarterly earnings that beat estimates by a penny a share; it also gave an encouraging outlook for the next quarter.

“It’s a continuation of a market looking ahead rather than looking behind,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “We’re going to see mixed news as we work our way out of things, but I think it will continue to be more positive than negative.”

Stocks have rallied in recent weeks on upbeat first-quarter profits, but investors are now looking for more solid evidence the economy will rebound later this year. A lack of such evidence led to bouts of profit-taking in recent days on mixed economic data.

“The unbridled optimism after the war is over; that was a feel-good mood,” Mr. Smalls said. “Now corporate earnings are out, they’ve been generally better than expected and so people are hopeful. But what we’ve got to do is see another quarter of that to get a little more resolve.”

Coca-Cola, another Dow component, rose $1.11 to $44.99 after a Bear Stearns analyst upgraded the soft drink giant’s stock rating to “outperform,” citing in part improvements from operations.

Gateway advanced 25 cents to $3.24 after the computer company said it would introduce a wide range of offerings in the coming year to boost profitability.

Decliners included Activision, which fell 67 cents to $16.90, after the video game maker reported a loss in the fiscal fourth quarter although it also raised its outlook for the coming quarter.

Advancing issues outnumbered decliners 5 to 2 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, a barometer of smaller-company stocks, rose 5.85, or 1.4 percent, to 413.53.

Overseas, Japan’s Nikkei stock average finished 1.5 percent higher yesterday. In Europe, France’s CAC-40 rose 1 percent, Britain’s FTSE 100 gained 1 percent and Germany’s DAX index increased 2.4 percent.

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