Archive for Wednesday, August 1, 2001

Economic report helps lift stock market

August 1, 2001


— Relieved investors sent stock prices sharply higher Tuesday as the last of companies' second-quarter earnings trickled in, but Wall Street was unable to hold its best gains of the day an expected turn of events given the market's tenuous state of health.

A positive report on consumer spending contributed to the rally, while disappointing readings on consumer confidence and manufacturing appeared to have little effect on trading.

The Dow finished up 121.09 at 10,522.81, after having risen as much as 191 points in earlier trading.

The market's broader indicators also moved higher. The Nasdaq composite index advanced 9.29 to 2,027.13, but like the Dow fell back from an earlier 39-point rise. The Standard & Poor's 500 index picked up 6.71, rising to 1,211.23.

Analysts were divided upbeat or cautious about how long the gains would last.

"It is the end of the bottoming out phase. It is the next up leg of the next bull market," said Charles Blood Jr., senior financial markets analyst at Brown Brothers Harriman & Co.

But others noted that a rally was to be expected with companies just about finished issuing their reports, which largely have been disappointing and often accompanied by warnings of weak results ahead. Rallies are expected to be vulnerable until earnings and the economy show signs of recovery.

"I'll give it the benefit of the doubt for right now," said Todd Clark, co-head of trading at WR Hambrecht, of Tuesday's upturn.

In trading Tuesday, 3M climbed $2.63 to $111.88, Merck rose $1.73 to $67.98 and Intel advanced 77 cents to $29.81. All three are Dow industrials.

Losers included firms that reduced their outlooks. Verizon, which met earnings expectations, fell $1.87 to $54.15 after reducing its outlook for the year.

World Wrestling Federation Entertainment, which offered fiscal 2002 revenue growth targets that suggest weak first-quarter growth, tumbled $2.39 to $10.50.

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