- The Washington Times - Wednesday, January 21, 2004

NEW YORK (AP) — Strong bank earnings pushed the Dow Jones Industrial Average and the Standard & Poor’s 500 index to 22-month highs yesterday, but technology stocks lagged amid disappointing news from Lucent Technologies and Motorola.

With little market-moving news coming out of President Bush’s State of the Union address on Tuesday night, analysts attributed the gains to upbeat quarterly profit reports, led by J.P. Morgan Chase. However, six weeks of advances in tech and telecommunications stocks prompted many investors to collect profits in those sectors.

The Dow closed up 94.96, or 0.9 percent, at 10,623.62. It was the highest close for the index stocks since March 19, 2002, when it ended the day at 10,635.25.

The broader gauges were mixed. The Nasdaq Composite Index closed down 5.53, or 0.3 percent, at 2,142.45. The S&P; 500 gained 8.85, or 0.8 percent, to 1,147.62 — its highest close since March 22, 2002, when it finished at 1,148.70.

Much of the advance came late in the day. Earlier, earnings reports appeared to be motivating some investors to sell.

Overall, fourth-quarter earnings are expected to rise 20 percent, but that might not be enough to match investors’ heightened expectations. Still, most analysts remain bullish about equities over the long term.

“The market is sorting out a number of things,” said Kevin Caron, market strategist with Ryan, Beck & Co. LLC. “There’s a clear improvement in fundamentals, there’s clear improvement in valuations … the market will find its own natural level.”

Also yesterday, the Commerce Department reported a 1.7 percent increase in housing construction in December, making 2003 the best year for home builders in 25 years.

The reading beat the estimates of analysts, who had forecast a 6 percent decline.

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