Wall Street’s Rally Resumes

It apparently will take more than a nuclear bomb to derail the U.S. stock market’s latest rally.

Share prices advanced Monday despite North Korea’s nuclear test.

In Asia most stock markets were modestly lower in reaction to news of the test, although South Korea’s main share index slumped 2.4%.

The dollar benefited as some global investors sought a haven. The U.S. currency rose against the yen and the South Korean won.

On Wall Street, the Dow Jones industrial average edged up 7.60 points, or less than 0.1%, to 11,857.81, after trading at a record 11,872.94.

Stocks dipped at the opening after North Korea said it had exploded a nuclear bomb, but buyers quickly got the upper hand.

“We are heartened by the fact the market seems to be shrugging off a major geopolitical event,” said Jim Russell, director of core equity strategy for Fifth Third Asset Management in Cincinnati.

But analysts noted that trading was thin because of the Columbus Day holiday. Bond markets were closed and many market players were absent.

Still, stocks also shook off a rise in oil prices. Near-term crude futures in New York added 20 cents to $59.96 a barrel.

Oil rose as high as $61.30 as the Organization of the Petroleum Exporting Countries appeared to move closer to an agreement to cut production. But the group said it wouldn’t meet to formalize the agreement.

“To the extent OPEC doesn’t have its act together, any gains will be forfeited and the trend lower will resume,” said John Kilduff, an oil market analyst at Fimat USA in New York.

Crude oil futures have plunged from a peak of $77 a barrel in mid-July.

Stock and bond markets have rallied briskly in recent months, bolstered by falling energy prices and by the Federal Reserve’s decision Aug. 8 to halt its two-year-long credit-tightening campaign, at least for the time being.

The Dow index has risen 684 points, or 6.1%, since Aug. 8, and last week recouped the last of its losses from the 2000-02 bear market. It hit a record closing high of 11,866.69 on Thursday before easing Friday.

On Monday, winners topped losers by more than 3 to 2 on the New York Stock Exchange.

The Nasdaq composite index rose 11.78 points, or 0.5%, to a five-month high of 2,311.77, paced by shares of Cisco Systems, which rose to their highest level since 2004 after Barron’s magazine published a favorable story on the company’s prospects.

The Standard & Poor’s 500 index gained 1.08 points, or 0.1%, to 1,350.66.

Today is the fourth anniversary of the bull market. It began with a powerful rally Oct. 10, 2002, after some upbeat quarterly earnings reports.

The Dow index, the S&P; 500 and the Nasdaq all had bottomed Oct. 9, 2002, after a wave of selling that summer and early fall tied to investor fears over the accounting scandals that brought down Enron Corp., WorldCom Inc. and other companies.

The Dow closed at 7,286.27 at the bear-market low. It has rebounded nearly 63% since then, through Monday.

Most broader indexes have risen much more substantially than the 30-stock Dow since the 2002 low. The S&P; 500 is up 74% and the NYSE composite index is up 92%.

Smaller stocks have mostly led the market since then. The Russell 2,000 small-stock index has surged nearly 128%.

But in recent months blue-chip stocks have taken the lead. The Dow is up 6.3% since the end of June, compared with a 2.7% advance for the Russell index.

Analysts say the next big test for the market will be third-quarter earnings reports, which will begin to trickle out this week.

Among Monday’s market highlights:

* Cisco rose 22 cents to $24.31, helped by the Barron’s story. Other tech issues rising in the session included Novellus Systems, up $1.09 to $28.90; F5 Networks, up $1.45 to $57.60; and Oracle, up 36 cents to $18.55, its highest since 2001.

Research in Motion, which makes the BlackBerry personal communication device, soared $4.81 to $113.60 after bullish comments from brokerage Merrill Lynch.

* Cablevision Systems surged $2.57 to $26.50 after the company’s controlling shareholders offered to take it private at $27 a share. Rival Comcast rose 53 cents to $37.66.

* Steel stocks resumed last week’s rally on expectations of more consolidation in the industry. U.S. Steel jumped $2.85 to $63.39; Nucor gained $1.55 to $52.67.

* Energy-related stocks fell as crude prices pulled back from their highs of the day. Exxon Mobil lost 97 cents to $66.55, ConocoPhillips eased 54 cents to $57.47 and Baker Hughes was down $1.72 to $67.51.

* Gold gained on the North Korean nuclear test. Near-term futures added $6 to $578.40 an ounce in New York.

The dollar rose to 119.12 yen, the highest since December and up from 118.98 on Friday.

* In Asia, Hong Kong’s stock market lost 1.3% and the Singapore market fell 1.1%. The Tokyo market was closed for a holiday.

In other foreign trading, the German market was little changed. Brazil’s main index gained 1.2%.

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Four years later

The bear market of 2000-02 ended Oct. 9, 2002, when major market indexes bottomed. Here are the percentage gains in key indexes since then.

*--* Pctg. change Index since 10/9/02 Dow utilities +155.9% Russell 2,000 (small stocks) +127.7 Dow Jones transports +127.6 Bloomberg REITs +126.9 S&P; 400 (mid-size stocks) +122.5 Nasdaq composite +107.5 S&P; 600 (small stocks) +106.1 NYSE composite +91.8 S&P; 500 +73.9 Dow Jones industrials +62.7

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Source: Times research