Stocks Rally Amid Holiday Relief

Next week, investors will have plenty to mull including earnings updates from Dow members Alcoa and GE

On light trade, bargain hunters looked past the last several weeks of corporate scandals and earnings disappointments to send stocks substantially higher Friday following a 4th of July holiday free of major terrorist attacks.

In a half-day session that ended at 1 p.m. ET, the tech-heavy Nasdaq composite index finished with strong gains, up 68.13 points, or 4.94%, to 1,448.30.

With help from every member of the Dow Jones industrial average except Coca-Cola (KO ), the index added 324.88 points, or 3.59%, to 9,379.85. The index enjoyed its biggest single-session point gain of 2002. And the broader Standard & Poor's 500-stock index finished up 35.02 points, or 3.67%, to 989.02.

Corporate earnings updates from Dow components Alcoa (AA ) and General Electric (GE ) are due next week. Safeway SWY , Yahoo! (YHOO ) and Sun Trust (STI ) are also set to release their latest earnings reports.

Next week's economic calendar starts slowly, but contains a few important releases. On Monday investors will mull the latest update on consumer credit -- a measure of consumers' willingness to take on debt amid the difficult economy. Standard & Poor's MMS expects consumer credit to grow $9.0 billion in May after adding $8.9 bln in April. Non-revolving credit is pegged to expand $4.0 billion while revolving credit is anticipated to rise $5.0 billion.

May wholesale inventories are due Wednesday, while June producer price index numbers, which are not expected to change much, are due Thursday. On Friday, June retail sales, and the preliminary Michigan confidence survey are on tap.

On Friday, Wall Street was unmoved by a shooting at the El Al ticket counter at the Los Angeles airport on the holiday, killing two people before being shot dead by guards. The shooting at the Israeli airline ticket desk raised worries across the United States as Americans feared the worst on the first Independence Day holiday since September 11. FBI officials said they believed the attack was an "isolated incident."

In company news, Dow component Merck (MRK ) was in the news. The drugmaker set proposed terms for its initial public offering of its Medco pharmacy benefit unit at 46.7 million common shares, with an expected price range of $20 to $22 apiece. A shareholder lawsuit was also filed against the company, alleging that the company misreported revenues for the Medco division.

Micron Technology(MU ) gained ground as semiconductor stocks were seen higher on bullish comments from Goldman Sachs on DRAM -- which are memory chips that serve as an indicator of the industry's health. Intel shares were also rising, in part, due to plans to introduce its latest high-speed chip.

In response to Wall Street Journal article that the company is being investigated by the Department of Justice Qwest Communications (Q ) says it has "no reason to believe we are subject of any investigation."

Grocery chain Great Atlantic & Pacific Tea Co. (GAP ), otherwise known as A&P, said it will restate results for two years after an accounting review. The company's 2001 results will be raised to net income of $12.5 million from a loss of $71.9 million. It will also restate 1999 and 2000 figures.

Treasury Market

Treasuries finished lower as investors bid the stock market higher Friday. The latest employment report was not as robust as hoped for, but did little good for bonds.

In economic news Friday, the June employment update showed a rise in non-farm payrolls by 36,000, which is less than S&P's expectation of a rise of 70,000. The unemployment rate rose to 5.9% from 5.8% in May. Also, hourly earnings rose 0.4%, a bit more than expected, but not enough to scare the Federal Reserve.

Overall, it was a disappointing report, but not terrible and still consistent with modest growth in the economy, says S&P chief economist David Wyss. The sluggish employment growth will keep the Fed on hold, probably into next year, he says.

World Markets

European stock markets gained ground Friday following the U.S. market's lead. In London, the Financial Times-Stock Exchange 100 index ended up 144.40 points, or 3.23%, to 4,615.60. France's CAC 40 finished higher by 166.15 points, or 4.49%, to 3,863.28. Germany's DAX index was up 4,446.27 points, or 4.41%, to 4,446.27.

Asian markets ended higher. In Japan, the Nikkei 225 index was helped by a rebound in tech stocks. The index jumped 193.28 points, or 1.82%, to 10,826.09. In Hong Kong, the benchmark Hang Seng index gained 40.58 points, or 0.38%, to close at 10,806.16.

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