- The Washington Times - Tuesday, September 2, 2003

NEW YORK (AP) — The Nasdaq Composite Index soared to a 17-month high yesterday after a string of upgrades of such technology heavyweights as IBM and Dell Computer. The buying intensified late in the day and spread across the market, sending the Dow Jones Industrial Average up more than 100 points in the final hour of trading.

Analysts attributed the rally to momentum and increasing optimism.

“The technical [investor] types are jumping on board, because the market averages are making news highs,” said Larry Wachtel, market analyst at Prudential Securities.

For much of the day, the market moved unsteadily, rising initially but then dipping lower before recovering in the afternoon. Analysts blamed the market’s meandering on the fact that stocks had been rallying for nearly six months, trading well above the lows they hit in mid-March.

Shaking off an early loss of 6.15, the Nasdaq jumped 31.03, or 1.7 percent, to 1,841.48, its fifth straight gain. The Nasdaq hasn’t seen a higher closing level since April 1, 2002, when it finished at 1,862.62.

The Dow rose 107.45, or 1.1 percent, to 9,523.27, its highest closing level since June 19, 2002, when the blue-chip average stood at 9,561.57.

The Standard & Poor’s 500 index advanced 13.98, or 1.4 percent, to 1,021.99. The last time the S&P; stood higher at the end of the day was June 18, 2002, when it was at 1,037.14.

The Dow’s biggest winner was IBM Corp., which soared $3.75 to $85.76 after Goldman Sachs upgraded computer hardware stocks. Dell Computer Corp., included in that upgrade, rose 97 cents to $33.59.

Goldman Sachs also raised its rating on software makers, which lifted Microsoft Corp. by 74 cents to $27.26 and PeopleSoft Corp. by 62 cents to $18.67.

The upgrades appeared to offset some early selling on doubts created by an economic report.

The Institute for Supply Management reported that its index tracking activity in the manufacturing sector rose in August for the second consecutive month, but the incremental improvement got a lukewarm reception from investors.

Wall Street was also unhappy with a poor showing in the report for employment in the manufacturing sector, suggesting that a recovery in that key area of the economy might be some ways off.

Analysts cautioned against reading too much into yesterday’s rally, noting that it was on light trading.

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