Wall Street receives welcome rebound

By Lisa Singhania

Associated Press

NEW YORK – Stocks soared Friday, giving Wall Street a solid one-week rebound from the devastating losses that followed the terrorist attacks on the World Trade Center and the Pentagon.

The Dow Jones industrials regained nearly half the 1,369 points they lost last week when trading resumed after the attacks. The Dow also recorded its second-biggest weekly point gain ever as investors, while mindful of the fragile economy and upcoming third-quarter earnings reports, decided to bet on bargain stocks.

“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.”

The Dow closed up 165.79 at 8,847.21, according to preliminary calculations, extending a 114-point advance from Thursday. The Dow, which rose four of the last five sessions, rose 7 percent or 611.40 for the week, an advance second only to the 666.41 of the week ended March 17, 2000.

Broader measures also rose. The Nasdaq composite index was up 38.06 at 1,498.77, a gain of 5.3 percent or 75.57 for the week. The Standard &Poor’s 500 index rose 22.33 to the 1,040.94, finishing the week up 75.14 or 7.8 percent.

Analysts said the market is trying to right itself after the shock of the attacks. But they cautioned against any assumption that the market won’t test its most recent lows again, noting the extent of the economic fallout from the tragedies and any U.S. military response remains unknown.

“It’s very much of a psychological battle in investing right now,” said John Forelli, portfolio manager for John Hancock Core Value Fund. “We don’t know if there’s going to be more terrorist attacks and, if companies do fall short of expectations when they start reporting earnings, stocks will still go down.”

“Whether we’ve seen a bottom is the big question, and I don’t think we have,” Acampora, the Prudential analyst, said.

The gains came on the last trading day of the third quarter. Such days can be volatile as fund managers adjust their portfolios but on Friday the market moved consistently higher.

Financial stocks soared, lifted by gains in American Express, up $1.60 at $29.06, and Citigroup, up 63 cents at $40.50.

Even Bank of New York was higher, rising $1.68 to $35, despite its warning it will miss third-quarter earnings targets because of the attacks.

Tech and retail stocks also showed some strength. Home Depot gained $1.47 to $38.37, while IBM advanced $2.30 to $92.30.

But Boeing fell 90 cents to $33.50 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 because 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.

Advancing issues led decliners more than 3 to 1 on the New York Stock Exchange, where volume came to 1.63 billion shares, compared with 1.47 billion on Thursday.

The Russell 2000 index gained 11.91 to 404.87.

Overseas, Japan’s Nikkei stock average gained 0.8 percent. European stocks also were higher. Germany’s DAX index advanced nearly 3.0 percent, Britain’s FT-SE 100 rose 2.9 percent, and France’s CAC-40 climbed 1.6 percent.