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Wall Street gains despite dismal data

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From Times Wire Services

Stocks extended their quarter-end rally Thursday despite some downbeat economic data and another jump in oil prices. The Dow index closed within 88 points of its record high reached in July.

Some analysts said investors were betting that the Federal Reserve would follow up its Sept. 18 interest rate cut with another in October.

Others said the buying appeared to be quarter-end “window dressing,” when some fund managers try to boost their returns for the period by adding to stocks that have done well recently.

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Whatever the source of the demand, most major stock indexes advanced. The Dow Jones industrial average added 34.79 points, or 0.2%, to 13,912.94. That left the index 0.6% below its all-time high of 14,000.41 on July 19.

The Standard & Poor’s 500 index rose 5.96 points, or 0.4%, to 1,531.38, and the technology-heavy Nasdaq composite gained 10.56 points, or 0.4%, to 2,709.59.

The Nasdaq 100 index, mainly comprising the biggest tech issues on that market, rallied 8.01 points, or 0.4%, to 2,096.39, the highest close since 2001.

Winners topped losers by 2 to 1 on the Big Board.

Wall Street seemed unfazed by the latest dismal data on the housing market. The Commerce Department said sales of new homes plunged 8.3% in August to the lowest level in seven years, suggesting no end in sight for the housing market’s woes.

But a report on weekly claims for unemployment benefits showed a drop.

In the Treasury bond market, a drop in yields hinted that bond traders were betting that the sinking housing market could give the Fed an excuse to cut its benchmark short-term rate again next month. The central bank cut the rate from 5.25% to 4.75% on Sept. 18, trying to ease the credit crunch that triggered market turmoil in summer.

The 10-year T-note yield fell to 4.57% from 4.62% on Wednesday.

Also, the Treasury Department sold $13 billion of five-year notes at a yield of 4.25%.

In the stock market, the quick recovery of many shares from the summer sell-off is boosting confidence, said Dave Hinnenkamp, head of KDV Wealth Management in Minneapolis.

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“A lot of it has to do with people sitting on the sideline with some cash when the market was coming down,” he said. “And now that they’ve seen it bounce up, I think some of it has to do with people diving back into the market not wanting to miss the rally.”

Among the day’s market highlights:

* Multinational industrial companies attracted buyers. 3M added 85 cents to a record $93.39 and United Technologies rose 49 cents to a record $80.69. Boeing rallied $1.01 to $105.46.

But General Motors retreated $1.18 to $36.46 after soaring $3.22 on Wednesday, after its strike settlement with the United Auto Workers

* Commodity-related shares, which have led the market for much of this year, padded their gains. Mining firm Rio Tinto jumped $8.28 to $338.60. Russian steel maker Mechel rose $2.04 to a record $51.93.

Gold mining stocks, hit by profit-taking in recent days, rallied as near-term gold futures in New York rose $4.10 to a 27-year high of $732.70 an ounce. Agnico Eagle jumped $1.18 to $48.14; Goldcorp was up 23 cents to $29.66.

* Beaten-down financial stocks gained for a second day. Citigroup added 33 cents to $46.88. Countrywide Financial rose 49 cents to $18.87.

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* Energy stocks were mixed even as crude futures in New York rebounded $2.58 to $82.88 a barrel, nearing the peak of $83.32 set Sept. 20. Exxon Mobil added 60 cents to $92.97 but Hess declined $1.02 to $67.41.

* In the tech sector, Cisco Systems gained 24 cents to $33.23, the highest closing price since 2001. Apple hit another record high, ending at $154.40, up $1.73. Citrix Systems rallied 70 cents to $40.68.

* In currency trading, the dollar’s slide continued against the euro, as the latter hit a record high of $1.416, up from $1.414 on Wednesday.

* Most major foreign markets advanced. Shares surged 2.4% in Tokyo, 2.2% in Brazil, 1.4% in India and 0.6% in Germany.

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