Stocks Climb Again Despite Security Alert
With the first anniversary of the Sept. 11 terror attacks looming, investors shrugged off a government security alert Tuesday and cautiously hunted for bargains, pushing major stock indexes to their first three-day winning streak in a month.
“There are tremendous ‘what if’ questions regarding Sept. 11, but the market is beginning to throw off some of its other worries,” said Milton Ezrati, senior economist at Lord Abbett & Co. “We haven’t had a corporate scandal in a while. If nothing happens on Sept. 11 and the U.S. shows some diplomatic savvy with Iraq, we think a rally is likely in the next months.”
The Dow Jones industrial average rose 83.23 points, or 1%, to 8,602.61. The Nasdaq composite index gained 15.49 points, or 1.2%, to 1,320.09. The benchmark Standard & Poor’s 500 index rose 6.62 points, or 0.7%, to 909.58.
The last time both the S&P; 500 and Dow gained for three straight days was Aug. 7-9.
Winners outnumbered losers by about 9 to 7 on Nasdaq and the New York Stock Exchange. Volume was light--about 25% below the three-month NYSE average.
“Maybe some people are saying, ‘Let’s wait until after Sept. 11 and when everything goes fine, then we’ll start buying again,’ ” said Thomas Garcia, head trader at Thornburg Investment Management in Santa Fe, N.M. “We’re not one of them, but I can understand the nervousness.”
U.S. exchanges will delay the opening of trading today until after a memorial service at the World Trade Center site.
A morning rally lost some power as the government put the nation on a “high risk” terrorism alert for the first time. Intelligence officials received credible threats of an attack against U.S. embassies and military facilities abroad, said Atty. Gen. John Ashcroft.
And the U.S. Navy warned that Osama bin Laden’s Al Qaeda network, which carried out the Sept. 11 attacks, may hit oil tankers in the Persian Gulf and Red Sea.
Indexes began their late rally after President Bush sought to downplay concerns, saying “we have no specific threat to America.”
Investors also are worried the U.S. may take military action against Iraq, traders said. Bush is to outline his Iraq policy in a United Nations speech Thursday.
United Technologies climbed $2.08 to $61.21, leading the Dow higher after the maker of Pratt & Whitney jet engines said it will meet its 2002 earnings target. Wal-Mart Stores, another Dow component, gained $1.50 to $54.78 and lifted retailers after an industry report showed sales rose for the week ended Saturday. Target, which plans to almost double the number of its stores in the next eight years, added 57 cents to $35.57.
Consumer spending is helping drive the sputtering economic recovery. Retail same-store sales rose 0.6% for the week ended Sept. 7 from a month ago, according to the Instinet Research Redbook weekly sales report. Sales at stores open at least a year rose 2.2% from the same week a year earlier, the report said.
“This is a good sign if it holds, but one week doesn’t make a quarter,” said Thornburg’s Garcia. “If we see several weeks of this, I could definitely change my mind.”
After hitting a seven-week high on Monday, gold fell $3.40 to $317.90 an ounce in New York as profit-taking speculators cashed in some winnings. The dollar rose against the euro and the yen.
But Treasury yields, which rose Friday and Monday on improving economic news, slid as investors sought safety in government securities. The yield on the benchmark 10-year Treasury note fell to 4.00% from 4.06% on Monday.
Among Tuesday’s other highlights:
* Semiconductor shares advanced after Taiwan Semiconductor Manufacturing reported an increase in August sales. The SOX index of chip stocks climbed 3.6%. Novellus Systems added $1.22 to $24.88; Intel rose 39 cents to $16.47; and Advanced Micro Devices gained 30 cents to $8.27.
* Financial shares were the biggest drag on the S&P; 500 after Astoria Financial said home refinancing is biting into profit. Fannie Mae, the biggest buyer of mortgages, and Washington Mutual, the biggest mortgage lender, had the largest losses in the S&P; 500. Astoria Financial plunged $3.90, or 12%, to $29.05. Fannie Mae lost $1.57 to $75.15, while Washington Mutual shed $1.45 to $36.90. Bank of America, the third-biggest U.S. bank, dropped 72 cents to $68.53.
* JetBlue Airways rose $3.98 to $43.76 after the low-fare carrier suspended plans for a secondary offering because major shareholders didn’t express interest in selling their shares. JetBlue is up 62% since its initial public offering on April 11.
* In overseas trading, European markets rallied. Key stock indexes climbed 2.8% in Britain, 3.1% in France and 1.9% in Germany.
Market Roundup, C6-7
