NEW YORK — NEW YORK -- U.S. stocks posted their broadest advance in almost three weeks yesterday as investors grew optimistic that the Federal Reserve will lower interest rates again this year. Bank, oil and retail issues led the gains.
A slew of reports indicating economic growth is slowing has rekindled expectations the Fed will cut rates. Lower rates help stocks by spurring economic growth and reducing corporate borrowing costs.
The Dow Jones industrial average, which has increased 24 percent so far this year, rose 11.20 points, to 4,766.68. Boeing Co., Procter & Gamble Co., Chevron Crop. and Texaco Inc. pushed the 30-stock average higher.
About 1,319 stocks rose and 943 fell on the New York Stock Exchange, the broadest advance since Oct. 13.
Chevron Corp. and Texaco Inc. gained as crude oil prices climbed on a report that Gulf Coast crude stockpiles declined for a sixth consecutive week. Chevron jumped 87.5 cents, to $47.625, and Texaco added 62.5 cents, to reach $68.75.
Aircraft maker Boeing climbed after the Wall Street Journal reported that Japan Air Lines plans to buy five of the company's 777-300 twin jets for $800 million. Boeing's shares added $2.50, to $68, its highest level in more than a month.
In the broader market, the prospect of lower rates brightened the outlook of banks' earnings, spurring a rebound in Citicorp, BankAmerica Corp. and Chase Manhattan Corp., among others. The group slumped the last two days, after peaking two weeks ago, as concern grew that delinquencies and loan-loss provisions are mounting.
Citicorp shares jumped $2.375, to $67.25; BankAmerica rose $1.25, to 58.75; and Chase Manhattan strengthened $1.75, to $58.75.
Gains in oil and retail shares also helped boost the Standard & Poor's 500-stock index, representing 74 percent of the value of all U.S. stocks, up 2.72, to 584.22 -- more than recouping Tuesday's losses.
The Nasdaq composite index rose to 1,040.50, up 4.44, as Intel Corp., Cisco Systems Inc. and US Healthcare Inc. spurted higher.
The Russell 2000 rebounded 1.45, to 297.70, recouping most of last week's losses. The American Stock Exchange market value index also reached its highest level in a week, rising 0.97, to 522.64. The Wilshire 5000 index climbed 10.21, to 5,762.25.
The yield on the benchmark 30-year bond dropped 4 basis points, at 6.29 percent, after earlier falling to 6.26 percent, its lowest level since Jan. 31, 1994.
AnnTaylor Stores Inc.'s shares gained even though the women's clothing company said same-store sales dropped 11 percent and that it will probably break even or slightly above for the quarter ended Oct. 28. Analysts expected AnnTaylor to make 6 cents a share, according to an IBES International Inc. survey of 13 analysts.
The retailer's shares are down 57 percent from their six-month high of $25.625 June 22. The worst may be over, analysts said.
The S&P; retail store index rebounded from its six-month low yesterday, rising 1.19, to 45.15.
On-line computer service company America Online Inc. gained $6.25, to $86.25, after declaring a 2-for-1 stock split, the third in 12 months.