By Lisa Singhania
Associated Press
NEW YORK – Stocks surged Friday as Wall Street moved toward a solid one-week rebound from the devastating losses that followed the terrorist attacks on the World Trade Center and the Pentagon.
Although investors were still worried about the economy, especially since third-quarter earnings reports are coming up, the market appeared poised to recover as much of a third of its loss last week, when the Dow Jones industrials fell 1,369.
“You had this huge loss last week on a lot of fear and concern, and prices became depressed,” said Ralph Acampora, director of technical research at Prudential Securities. “We call that an oversold market and at some point you get a relief rally and that’s what this is – a nice, technical bounce.”
In midday trading, the Dow was up 135.83 at 8,817.25, extending a 114-point advance Thursday.
Broader indexes also rose. The Nasdaq composite index was up 33.57 at 1,494.28, while the Standard &Poor’s 500 index rose 17.01 to the 1,035.62.
The gains came on the last trading day of the third quarter. Such days can be volatile as fund managers adjust their portfolios but at least in early trading, the market moved consistently higher.
“You might have some mutual funds putting cash to work before the quarter ends,” said John Forelli, portfolio manager for John Hancock Core Value Fund.
Exelon rose 50 cents to $45 despite lowering its third-quarter and full-year earnings outlook. The utility is also cutting 450 jobs.
Investors also bid the Bank of New York higher, up $1.69 to $35.01, although it warned it won’t hit third-quarter earnings targets because of the attacks on the World Trade Center.
Bank of New York’s advance was part of a broader move in financial stocks, which had fallen on worries about a recession and consumer spending. Dow component American Express rose $2 to $29.46, a 7 percent gain.
But Boeing fell $1.12 to $33.28 on ongoing worries the aircraft manufacturer will be hurt by Americans’ fear to fly in the aftermath of the terrorist attacks.
Also Friday, the Commerce Department reported the U.S. economy grew at a rate of 0.3 percent growth rate in the April-June quarter, higher than the 0.2 percent previously reported.
Investors had little reaction, though, since the report concerned this past spring, rather than the present. It also was expected given the bad economic and corporate news the market has been hearing for months.
Analysts say investors are still worried about the economy, particularly the fallout from the terrorist attacks. They caution against any assumption that the market won’t test its most recent lows again.
“Whether we’ve seen a bottom is the big question, and I don’t think we have,” Acampora, the Prudential analyst, said.
Advancing issues led decliners more than 3 to 1 on the New York Stock Exchange. Volume came to 472.17 million shares, compared with 389.80 million at the same point Thursday.
The Russell 2000 index gained 8.64 to 401.60.
Overseas, Japan’s Nikkei stock average gained 0.8 percent. European stocks also were higher. Germany’s DAX index was up 2.1 percent, Britain’s FT-SE 100 was up 2.6 percent, and France’s CAC-40 rose 1.6 percent.
Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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