Bulls Romp, Dow Soars 71.54 Points

The stock market began the week with a bold rally today, as investors were betting that the worst economic news is over and the economy will soon pull out of recession.

The Dow Jones average of 30 industrials closed 71.54 points higher at 2,902.23, a whopping gain of 2.53%.

New York Stock Exchange volume was a brisk 265.35 million shares. Gainers outpaced losers 1,404 to 340.

Analysts said that investors were anxious not to be left out of a rally, which has added more than 160 points to the Dow since last week.

“The market has built up so much momentum, you can’t fight it with profit-taking,” said David Holt, technical research director at Wedbush Morgan Securities.

Dale Tills, manager of institutional equities at Charles Schwab & Co., said, “Everyone’s jumping on board now. I thought we’d see a little continuation of Friday’s market, but not like this.”

Analysts also said investors remained in a positive frame of mind over the progress of the Gulf War.

And they also noted hopes that interest rates would decline further in the near future as the Federal Reserve seeks to cushion the effects of the recession and credit crunch.

Rates fell in the credit markets today. Yields on long-term government bonds, which recently dropped through the 8% level, stood at about 7.93%.

The drop in interest rates has stirred widespread hopes for the beginnings of a business recovery in the not-too-distant future.

Gainers among the blue chips included Philip Morris, up 1 3/4 at 61 an hour before the close; McDonald’s, up 1 at 29 3/4; General Electric, up 1 1/2 at 66 3/4, and American Express, up 1 1/4 at 25 3/4.

But General Motors dropped 3/8 to 36 7/8. Chairman Robert Stempel said U.S. car sales in the first quarter were running slower than in the fourth quarter of last year.