- The Washington Times - Monday, October 17, 2005

NEW YORK (AP) — Wall Street rallied to finish moderately higher yesterday as nervous investors got some reassurance from General Motors Corp.’s new labor agreement and a favorable court ruling for cigarette makers. Technology stocks rebounded ahead of three major profit reports.

GM’s tentative union deal calmed investors who feared worsening finances at the struggling automaker. The market also got a lift from strong quarterly earnings in the financial sector and the Supreme Court’s refusal to let the government pursue a $280 million racketeering penalty against tobacco firms.

The upbeat news helped offset rising crude oil, which added nearly $2 a barrel as a strengthening Tropical Storm Wilma posed yet another threat to the Gulf Coast region. A barrel of light crude climbed $1.73 to settle at $64.36 on the New York Mercantile Exchange.

At the close of trading, the Dow Jones Industrial Average had gained 60.76, or 0.59 percent, to 10,348.10.

Broader stock indicators also advanced. The Standard & Poor’s 500 Index rose 3.53, or 0.3 percent, to 1,190.10, and the Nasdaq Composite Index added 5.47, or 0.26 percent, to 2,070.30.

Bonds stayed flat after last week’s sell-off, with the yield on the 10-year Treasury note unchanged at 4.49 percent from late Friday. The dollar was mixed against most major currencies, and gold prices edged lower.

With little economic data due yesterday, investors were relying on the first wave of third-quarter earnings reports as a gauge of the economy and Gulf Coast recovery efforts from Hurricanes Katrina and Rita.

Technology investors received good news after the session, when International Business Machines Corp. said its third-quarter profit dipped but still beat Wall Street targets by 13 cents per share. IBM rose 24 cents to close at $82.59, and gained another $1.09 in after-hours activity.

Intel Corp. and Motorola Inc., also considered major barometers of the tech sector’s health, are set to report earnings today. Intel climbed 23 cents to $23.46, while Motorola sank 22 cents to $19.94.

General Motors jumped $2.11 to $30.09 after the company said it reached a deal with the United Auto Workers to cut health care costs.

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