Investors Remain Optimistic; Stocks Rise
Stocks closed broadly higher Tuesday thanks to a late rally, as the optimists continued to keep control on Wall Street.
Analysts have been encouraged by the market’s ability in recent sessions to hold on to its gains of the last three weeks, despite rising fears of bioterrorism fanned by anthrax infections.
The Nasdaq composite index gained 25.76 points, or 1.5%, to 1,722.07, its highest close since Sept. 5.
The Dow industrials added 36.61 points, or 0.4%, to 9,384.23.
Investors were more interested in smaller names. The Russell 2,000 index of smaller stocks rose 1%, more than twice the blue-chip Dow’s advance.
Trading was active, and winners topped losers by 20 to 11 on the New York Stock Exchange and by 11 to 7 on Nasdaq.
The market rallied early in the day, pulled back, then resurged at the end of the session.
“It’s been very impressive the way the market’s been bid up, even with the anthrax scares,” Jon Brorson, chief investment officer at Northern Trust Corp. in Chicago, told Bloomberg News.
Third-quarter corporate earnings reports are having a mixed effect on stocks. Many analysts argue that investors are prepared for bad news in the reports, given the weak economy overall in the third quarter--made worse by the Sept. 11 terrorist attacks.
“These results are disappointing from the standpoint of comparisons from the third quarter a year ago but are in line with what companies had been guiding expectations down to,” said Bill Barker, investment consultant with brokerage Dain Rauscher.
So far, many investors “are willing to look through this in anticipation of an economic recovery and some earnings improvement as we go forward into 2002,” he said.
In the bond market, Treasury yields fell on news of a steep drop in September industrial production. That leaves room for the Federal Reserve to continue lowering interest rates, some analysts say.
The yield on the five-year T-note dipped to 3.76% from 3.81% Monday. That yield is nearing its recent low of 3.71% reached on Oct. 3.
Among Tuesday’s highlights:
* Many foreign stock markets continued their recent rebounds. The French market gained 2.2%, German stocks rose 1.7% and the Japanese market added 1.8%.
* Bank stocks rallied amid a torrent of quarterly earnings reports. Bank of America, which reported earnings Monday, rose $2.16 to $57.71. Other winners included Bank One, up $2.46 to $32.81 after reporting quarterly results; Citigroup, up $1.29 to $46.09; and FleetBoston, up 85 cents to $32.85.
But Wells Fargo eased 58 cents to $40.19 after its earnings report. And Downey Financial dived $4.99 to $36 after falling short of earnings estimates.
* Charles Schwab jumped $1.10 to $12.10 after the brokerage said quarterly operating earnings were down 51% from a year earlier but still slightly higher than analysts’ lowered expectations.
* Vivendi surged $4.24 to $50.09 after the French government lowered the cost of permits for faster wireless services. Vivendi owns France’s No. 2 wireless network.
* Bethlehem Steel crumbled 98 cents to 22 cents in the wake of the company’s bankruptcy filing Monday. Rival Nucor rose $1.05 to $39.95, while National Steel eased 5 cents to $1.05.
* In the tech sector, Dell Computer rose 69 cents to $24.27, Cisco Systems jumped 76 cents to $16.97 and Check Point Software rallied $2.35 to $32.17. Also, Broadcom gained $2.13 to $31.97 and Texas Instruments rose $1.15 to $31.49.
* Some real estate investment trusts that focus on hotels tumbled after brokerage Salomon Smith Barney cut ratings on shares and said they might not pay fourth-quarter dividends, as travel slows.
Host Marriott slid 88 cents to $6.87, FelCor Lodging Trust lost 65 cents to $14.95 and MeriStar Hospitality slumped $1 to $10.49.
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Market Roundup: C8, C9
