- The Washington Times - Tuesday, May 27, 2003

NEW YORK (AP) — Encouraging economic reports on consumer confidence and home sales gave Wall Street a shot of adrenaline yesterday, sending the Nasdaq Composite Index to its best level in nearly a year.

The Dow Jones industrials also soared, moving up nearly 180 points.

“Housing sales were pretty good and consumer confidence was a decent number. People saw that as a positive and decided, ‘Let’s pick up some bargains’ after last week’s declines,” said Todd Leone, managing director of equity trading at SG Cowen Securities.

Trading was moderate after the long holiday weekend. The nation’s markets were closed Monday for Memorial Day.

The Nasdaq climbed 46.60, or 3.1 percent, to close at 1,556.69, after a weekly loss of 1.9 percent to end a five-week winning streak. That was the highest level seen since June 5, when the tech-focused index closed at 1,595.26.

The Standard & Poor’s 500 index advanced 18.26, or 2 percent, to 951.48, having dropped 1.2 percent last week to end its five weeks of gains. It was the highest level since Aug. 22, when the index closed at 962.70.

And the Dow rose 179.97, or 2.1 percent, to 8,781.35, having fallen 0.9 percent in the past week to snap a three-week winning streak. That was the best seen since Jan. 14, when the blue chips finished at 8,842.62.

The positive economic reports helped overcome investor jitters after the euro briefly hit an all-time high against the dollar yesterday. The Dow fell as much as 60 points in early trading on fears that a weak dollar will deter foreign stock investment before rebounding.

After several weeks of market rallies on upbeat earnings, many investors are looking for more concrete signs of an economic recovery. Analysts say the reports yesterday offered some evidence of that, although they added that trading still is likely to be choppy and confined to a range until investors see more positive data.

“This isn’t going to be a daily event,” said Hugh Johnson, chief investment officer at First Albany Corp., referring to the market gains yesterday. “The problem is valuation. We have come very far, very fast. It’s ahead of itself, and it’s time for a breather.”

Gainers included biotech companies Genentech, which advanced $2.92 to $63.85, and Biogen, which rose $2.38 to $42.88.

ImClone Systems surged $4.75 to $24.60 after the company said it received a $6 million milestone payment from Merck KGaA for its cancer drug Erbitux.

Tenet Healthcare jumped 59 cents to $16.14 after Chief Executive Officer Jeffrey Barbakow said he would resign. The hospital chain is under investigation for possible improprieties in Medicare payments.

But Altria Group, the parent of Philip Morris, fell 22 cents to $42.09 after UBS Warburg downgraded the company’s stock, citing overvaluation after a favorable ruling in a Florida tobacco class-action suit.

And Vodafone dropped 40 cents to $20.54 after the British mobile-phone giant reported a narrower loss for the fiscal year, citing stronger sales.

Advancing issues outnumbered decliners 5-to-2 on the New York Stock Exchange. Volume came to 1.51 billion shares, up from 1.20 billion traded Friday.

The Russell 2000 index, which tracks smaller-company stocks, rose 9.31, or 2.2 percent, to 427.71.

Overseas, Japan’s Nikkei stock average finished 1.3 percent lower yesterday. In Europe, France’s CAC-40 rose 0.4 percent, Britain’s FTSE 100 gained 0.3 percent and Germany’s DAX index increased 1.6 percent.

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