- The Washington Times - Friday, July 31, 2009

NEW YORK | Stocks added to an impressive run Thursday as another round of earnings reports gave investors new reasons to be optimistic about the economy.

The Dow Jones Industrial Average rose 84 points and the Nasdaq Composite Index traded above 2,000 for the first time since October.

The latest reports struck on a theme that has played out for weeks: Times are tough, but companies aren’t doing as badly as had been feared. Many have chopped costs to produce profits well beyond the market’s modest expectations.

Motorola Inc. said it used deep cost cuts to wring a profit from its latest quarter. Analysts had expected a loss. Goodyear Tire & Rubber Co.’s shortfall was half what had been expected.

A surprise drop in the number of people continuing to seek unemployment benefits gave investors even more reason to put money into stocks.

With one day to go, the Dow was up 8.4 percent for the month, its strongest July since 1989, when it gained 9 percent. A report on the overall output of the economy is sure to drive the market’s direction Friday.

The Dow rose 83.74, or 0.9 percent, to 9,154.46 after being up as much as 176 points. The Standard & Poor’s 500 Index rose 11.60, or 1.2 percent, to 986.75. It rose to nearly 997 during the day. It hasn’t traded above 1,000 since November.

The Nasdaq advanced 16.54, or 0.9 percent, to 1,984.30. It rose to nearly 2,010 in morning trading, its first move above 2,000 since Oct. 3. The index is up 56 percent from its low of 1,269 in March.

The buying began July 13 when investors bet correctly that Goldman Sachs Group Inc. would report enormous earnings. Since then, other profit reports have brought hope that the longest recession since World War II might end this year. AT&T; Inc., chipmaker Intel Corp. and heavy equipment maker Caterpillar Inc. all posted results that outran expectations.

Three out of four companies in the S&P; 500 index that reported second-quarter results so far have topped analysts’ expectations, according to Thomson Reuters. About 300 of the 500 companies have reported.

Analysts said the end of the month is pressuring money managers and traders to show they have kept up with July’s steep rally. Often, the summer months are quieter than the rest of the year on Wall Street as traders take vacations.

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