Stocks Climb Back to Pre-Attack Levels
Boosted by some positive earnings reports, stocks rallied for the second straight day on Thursday to help the major averages close higher at levels not seen since before the September 11 terrorist attacks.
Both the tech-heavy Nasdaq Composite Index and the Standard & Poor's 500 Index, a broader gauge of the market, have erased losses accumulated since September 11. The Nasdaq Composite index closed up 75.21 points, or 4.62%, to 1,701.47. The Nasdaq closed at 1,695.38 on September 10. The Standard & Poor's 500 Index added 16.44 points, or 1.45%, to 1,097.43. The S&P index closed at 1,092.54 on September 10.
Meantime, the Dow Jones industrial average climbed 169.59 points, or 1.84%, to 9,410.45 on Thursday. The blue-chip average remained around 200 points shy of recovering its losses since the attacks. The Dow finished at 9,605.51 on September 10.
In addition to earnings news, hopes for an economic recovery next year -- following government stimulus packages and aggressive rate cuts by the Federal Reserve -- added to the upbeat mood on Wall Street.
"Stocks have reached value levels and we have been improving since [the September 11 attacks] with positive money flows," says A.C. Moore, chief investment strategist at Dunvegan Associates in Santa Barbara. The trend is likely to continue into the next six to 12 months, Moore adds. Thursday marks the one-month anniversary of the attacks against the World Trade Center and the Pentagon.
On the earnings front, General Electric Co. (GE ) posted a 3% rise in third-quarter profits as its power systems business helped offset the effect of a weak economy in other businesses.
Genentech Inc. (DNA ), a leading biotechnology company, posted a 22% rise in earnings before charges, at the high end of Wall Street estimates, boosted by strong sales of its antibody-based cancer drugs.
And in technology late Wednesday, Internet media company Yahoo! Inc. (YHOO ) reported a loss in line with the Street's estimates, and a drop in revenues. The company added it may have to cut more jobs this year as it deals with the economic downturn.
Among other stocks in the news on Thursday, Internet brokerage E*Trade Group Inc. (ET ) said its third-quarter operating profit rose 29%, despite a sharp drop in stock trading.
Leading gainers included retailers, electrical instrument makers, and semiconductor companies. Meantime, oil prices rose on signs the world's largest exporter, Saudi Arabia, tightened its production curbs.
U.S Treasuries finished lower, in a knee-jerk reaction to an unexpected drop in initial jobless claims last week. The data shows the remaining impacts of the September 11 attacks. The four-week moving average now is at a high not seen in nearly a decade. Initial jobless claims fell by 67,000 for the week ended Oct. 6, to a seasonally adjusted 468,000.
With positive profit results from U.S. tech companies providing a lift, European markets closed higher. In London, the Financial Times-Stock Exchange 100 index gained 11.80 points, or 1.28%, to 5,164.90. In France, the CAC 40 added 11.30 points, 0.26%, to 4,330.68. And in Germany, the DAX Index was up 105.27 points, or 2.28%, to 4,718.46.
In Asia, the markets ended with solid gains. The Nikkei surged 382.13 points, or 3.83%, to 10,347.01. The market gathered momentum later in the session, fueling sharp gains in big-cap telecoms, tech and automobile shares. In Hong Kong, the market added 224.37 points, or 2.18%, to 10,522.61.
By Heesun Wee in New York