Associated Press
NEW YORK — Wall Street had its first truly upbeat day since the terrorist attacks, surging Wednesday on a positive outlook from Cisco Systems and the possibility of a $65 billion economic stimulus package. The Dow industrials closed above 9,000 for the first time in three weeks.
The market waffled in early trading but rose decisively as President Bush in televised remarks in New York urged Congress to approve a plan to stimulate the economy, already weak before the assaults. The plan includes tax cuts for individuals and business and is worth $60 billion and $75 billion.
Stocks, especially high-techs, widened their lead in midafternoon trading after Cisco chief executive John Chambers affirmed the company’s outlook. The upturn on Wall Street added to a rally Tuesday triggered in part 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.
The Dow surged 173.19, closing Wednesday at 9,123.78, 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 hadn’t closed above 9,000 since the Sept. 11 terrorist attacks. The blue chips have regained nearly 900 points, or 65 percent, of the 1,369 they tumbled in the first week of trading after the attacks.
"At least for today investors are off the sidelines. … People are putting money to work," Hogan said.
Wednesday’s upturn was a switch for the market, which has struggled amid the business fallout, namely thousands of layoffs and a series of profit warnings, that has followed the attacks. While it surged higher last week and Tuesday, those advances were more technical in nature or due to bargain hunting; they lacked the more positive sentiment of Wednesday’s trading.
"Three weeks after the greatest shock in our collective lives, there is a tremendous realization that the world is not going to come to an end," said Scott Bleier, chief investment strategist for Prime Charter Ltd.
Bleier attributed the buying to lower interest rates, the possible economic stimulus plan and steeply discounted stock prices.
Among Wall Street’s winners were companies that stood by earnings forecasts. Cisco rose 21.5 percent, up $2.47 at $13.95, after CEO Chambers backed the networker’s earnings forecast for the fiscal first quarter despite a disruption in orders following the terrorist attacks.
Cisco’s midafternoon news boosted the tech sector, where Microsoft climbed $3.18 to $56.23 and Intel rose $1.71 to $21.23.
Boeing rose $2.34 to $36.59, Citigroup gained $1.23 to $43.48, and Home Depot advanced $1.78 to $40.83.
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