Stocks rise Wednesday as investors are optimistic for economic recovery

By Amy Baldwin

Associated Press

NEW YORK – The Dow Jones industrials reclaimed the 9,000 level for the first time in two weeks Wednesday as investors, heartened by President Bush’s push for an economic stimulus plan, sent stocks higher.

The market had waffled in early trading but moved up decisively as Bush, in televised remarks in New York, urged Congress to approve the plan, including tax cuts for individuals and business, worth $60 billion and $75 billion.

The upturn on Wall Street added to a rally triggered Tuesday by the ninth interest rate cut so far this year.

“People are believing that between fiscal and monetary policy, the economy will stabilize,” said Arthur Hogan, chief market analyst at Jefferies &Co.

In midafternoon trading, the Dow was up 89.88 at 9,040.47, having risen 113 Tuesday after the Federal Reserve cut rates by half a percentage point.

Wednesday was the first time the Dow has broken the 9,000 level since Sept. 18; it hasn’t closed above 9,000 since the Sept. 11 terrorist attacks. The blue chips have regained more than 800, or 59 percent, of the 1,369 points they tumbled in the first week of trading after the attacks.

The broader market was also higher as the Nasdaq composite index rose 77.39 to 1,569.72 and the Standard &Poor’s 500 index advanced 13.26 to 1,064.59.

Among Wall Street’s winners were companies that stood by earnings forecasts. Upscale housewares retailer Williams-Sonoma rose $4, or 18 percent, to $26.20 after affirming third-quarter profit estimates.

But stocks rose across an array of sectors, indicating how optimistic investors were feeling about an economic recovery.

IBM rose $2.62 to $96.39, Boeing gained $1.98 to $36.23, and Wal-Mart advanced 65 cents to $52.65.

On the downside were companies that acknowledged business is slowing. Citing poor sales of its drug Prozac, Lilly lowered its earnings estimates for 2001 and 2001, and its shares fell $4.37, or 5.3 percent, to $78.50.

Advancing issues outnumbered decliners slightly more than 9 to 5 on the New York Stock Exchange. Volume was moderate at 999.87 million shares.

The Russell 2000 index, which measures the performance of smaller company stocks, rose 8.28 to 410.07.

Stocks were mixed overseas Wednesday. Japan’s Nikkei stock average closed the day down 2.1 percent, and France’s CAC-40 fell 0.5 percent. But Germany’s DAX index was up 1.1 percent in afternoon trading, while Britain’s FT-SE finished up 1.0 percent.