|
Prewar stocks post biggest gain Original Source Link: (May no longer be active)
http://www.msnbc.com/news/534548.asp?vts=031320031630http://www.msnbc.com/news/534548.asp?vts=031320031630
Stocks post biggest gain of the year
By Roland Jones, MSNBC
Stocks soared Thursday, with the Dow Jones industrial average recording its biggest one-day percentage gain since Oct. 15, as investors snapped up beaten down shares on hopes for a swift resolution to the Iraq crisis.
THE DOW INDUSTRIALS closed the session up 269.68 points, or 3.6 percent, at 7,821.75, adding burly gains to Wednesday's 28-point rise.
Other market averages rallied Thursday, including the broader Standard & Poor's 500-stock index, which climbed 27.71 points, or 3.5 percent, to close at 831.90.
The technology sector fared especially well, with the Nasdaq Composite index up 61.54 points, or 4.8 percent, at 1,340.78 by the close, recording its biggest single-day percentage gain since Jan. 2.
European stocks bounced off Wednesday's lows, and the U.S. dollar ignored some weak economic data and rose against other major currencies. Bonds sold off.
MARKETS CLIMB ON HEAVY VOLUME
Stock prices rushed higher at Thursday's open, helped by a confluence of factors, including a surge in the dollar, a rebound in European stock markets and news reports, later denied by the State Department, that senior Iraqi officials are in secret surrender talks. The price of gold, traditionally a safe-haven investment, fell to its lowest level in months.
These factors led to a flurry of bargain hunting, as traders snapped up stocks beaten down in recent months by war anxiety. So-called short covering also fuelled the rally, as short sellers -- bearish investors who sell borrowed stock buy it back later at a lower price, pocketing the difference, covered their short positions by buying more shares as stock prices climbed.
Trading volume, which has been weak for months as traders have shunned stocks, was strong.
"We've hit an oversold condition and now we're trading on all four cylinders," observed Kent Vogel, a trader on the American Stock Exchange, in a CNBC interview.
Vogel added that some investors were encouraged by signs the Iraqi crisis may be near resolution. At the United Nations, the United States said it might abandon its search for a U.N. Security Council majority to sanction military action against Iraq.
The strongest Dow 30 stocks included General Electric, General Motors, Caterpillar, United Technology and Walt Disney. Hewlett-Packard was among the very few declining Dow issues, down 3.7 percent to $15 after the computer maker admitted to an accounting error.
Semiconductor stock led a rally in technology sector, with Intel climbing 7.1 percent to 17.35. The Philadelphia Stock Exchange's semiconductor index rallied 8 percent.
TYCO REDUCES 2003 OUTLOOK
Shares of Tyco International tumbled 12.4 percent to $12.29. Late Wednesday, the conglomerate reduced its 2003 profit forecast and said it has fired the president of its fire and security unit, Jerry Boggess, after uncovering accounting problems. The firm also said it would close 300 plants over the next three years.
Dutch electronics firm Philips said Thursday it will cut about 1,600 jobs in the United States and Europe, and will close a semiconductor plant in San Antonio as part of a restructuring plan, as the company strives to return its semiconductor division to profitability.
San Francisco-based investment bank Thomas Weisel Partners will cut about 200 jobs, or a third of its staff, according to a CNBC report.
After Wednesday's close, Dow component International Paper, the nation's number-one maker of paper and wood products, warned that its first-quarter profit will miss analysts' forecasts, citing higher energy costs and weak demand.
On the Nasdaq market, Comverse Technology rallied 19.2 percent to $11.34 after posing a quarterly loss that narrowed from a year earlier and predicted a return to profitability in 2003. The communications software maker also said its president, Itsik Danziger, will resign, but remain on the company's board.
FEBRUARY RETAIL SALES SLIDE
A handful of economic reports issued before Thursday's open gave investors more signs of how the U.S. economy, and consumers, which represent about two-third of all U.S. economic activity, are holding up as the nation prepares for a possible war with Iraq.
The Commerce Department said U.S. retail sales fell a bigger-than-expected 1.6 percent in February, their largest drop since November 2001 and the first decline since September 2002. Consumer spending sank across a wide range of sectors, the government said, as war fears and winter storms kept consumers away from the malls.
Excluding auto sales, February retail sales fell 1.0 percent, the biggest drop since September 2001.
"The weather effect makes it hard to tell what the real trend in sales is," remarked Ian Shepherdson, chief U.S. economist at High Frequency Economics, in a note to investors. "These data look awful, but we expect a hefty March rebound."
In other economic news, the Labor Department said the number of U.S. workers signing up for first-time jobless benefits thinned a little last week, but remained at levels signifying a weak labor market. Initial claims for jobless benefits fell 15,000 to a seasonally adjusted 420,000 for the week ended March 8.
The United States and Britain indicated Thursday they are willing to extend the deadline for a United Nations Security Council vote on a new resolution authorizing war against Iraq until next week.
France dealt another blow to the two nations' efforts to secure a resolution, pointing out Thursday that it does not think Iraq should face a United Nations disarmament deadline that might lead to military conflict.
The dollar was stronger, trading at 1.0813 dollars to the euro and 118.48 yen to the dollar, compared with 1.1000 dollars and 117.26 yen late Wednesday.
MSNBC Terms, Conditions and Privacy ©2003
|
|
