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Dow Jones climbs back over 10,000


The Dow Jones industrial average closed above 10,000 yesterday for the first time since Sept. 5, buoyed by optimism of a quick economic recovery and investors not wanting to miss out on the early stages of a bull market.

The blue-chip index gained 220.45 points, or 2.23 percent, to 10,114.29 amid heavy trading.

The Dow's high-tech components were strong. International Business Machines Corp. climbed $4.76 to $121.40; Microsoft Corp. rose $2.10 to $68.10; and Intel Corp. gained $1.75 to $34.61.

Though there's nothing magical about 10,000, the number does strike a psychological chord with investors.

"For the average investor who remembers when we first went over 10,000, it is a psychological boost. It shows that the market is rebounding and we've come a long way since the low of Sept. 21," said Mario DeRose, a market strategist with Edward Jones in St. Louis.

Said Hugh Johnson, chief investment officer at First Albany Corp. in Albany, N.Y.: "What is more important than 10,000 is the fact that the stock market has been going up when the economic news has been deteriorating."

The technology-laden Nasdaq composite index closed above 2,000, a feat it hasn't managed since Aug. 7. The Nasdaq soared 83.74 points, or 4.27 percent, to 2,046.84 yesterday.

The broader Standard & Poor's 500 index jumped 25.55 points, or 2.23 percent, to 1,170.35.

Despite occasional setbacks, the market has been on an uptrend since late September.

Part of the credit for yesterday's broad-based rally was given to a better-than-expected report on the economy's services sector by the National Association of Purchasing Management. The trade group reported that its services index climbed to 51.3 in November, after dipping to a four-year low of 40.6 in October. Anything over 50 indicates growth. The index had been stuck below 50 for more than a year.

"From time to time, you get numbers that indicate that the recovery may be beginning right now," said Johnson. Yesterday's Purchasing Management number is one of those, he said.

Technology stocks helped drive the market. Analysts pointed to positive statements from executives at Cisco Systems Inc. and Oracle Corp. which suggested that the worst is over and that demand for technology is on the rise.

And, analysts said, stocks jumped because investors are optimistic that an economic recovery is just around the corner and they don't want to get left behind by the stock market.

"There is so much stimulus in the pipeline, in the form of lower interests rates and increased spending in Washington ... that it is hard to imagine that the economy will not do better next year," Johnson said.

Federal Reserve policy-makers have cut interest rates 10 times this year to stimulate the economy. They meet next week, and some analysts expect another rate cut.

DeRose said the more optimistic analysts predict that the recession will end in the first quarter next year, although he expects it to last until the second or third quarter.

Recent rising stock prices have attracted money to the market.

"You certainly can't be sitting on a boatload of cash at the end of the year," said Clarence W. Woods, chief equity trader of Allied Investment Advisors in Baltimore. Woods predicts that both the Dow and the S&P; 500 will end the year in positive territory. As of yesterday, the Dow was down 6.23 percent for the year and the S&P; was off 11.36 percent.

The Nasdaq, down 17.15 percent this year, has further to go to climb out of the hole.

Some experts say a new bull market began after the market hit a low on Sept. 21. A bull market is commonly declared when the market rises 20 percent above its low point. Yesterday, the Dow was up nearly 23 percent over its Sept. 21 close of 8,235.81.

But not everyone is sure a sustained bull market has begun, and some predict that the Dow will retreat from the 10,000 mark.

"We have had a broad-based advance. It's been impressive, indeed, but it still appears to be without enough earnings data," said Alan Ackerman, a market strategist with Fahnestock & Co. in New York.

Ackerman said he would be much more confident about stocks pushing higher if the country had an economic stimulus package and energy policy in place.

"People are anticipating a recovery when you can't see much evidence of it," said Charles Knott, chief investment officer of Knott Capital Management in West Chester, Pa.

Knott said stock valuations are still high and earnings aren't recovering quickly. The market is volatile and can't handle sustained bad economic news, he said. "By next March, if we are still getting bad news, I suspect that the stock market won't be as buoyant no matter what the Federal Reserve Board is doing."

Elsewhere on the broad market yesterday, the Russell 2000 index, the benchmark of small-cap stocks, advanced 11.58, or 2.5 percent, to 479.42, and the Wilshire 5000 total market index jumped 239.69, or 2.3 percent, to 10,834.46.

The Sun-Bloomberg index of the top stocks in Maryland gained 3.78 to 213.50. BioReliance Corp. surged $3.43 to $31.61 and MedImmune Inc. soared $3.40 to $45.72.

Volume came to 1.78 billion shares on the New York Stock Exchange, nearly 40 percent more than the 1.29 billion shares traded Tuesday.

Technology stocks dominated yesterday's buying spree. Indeed, eight of the 10 most-traded stocks were technology issues.

Cisco Systems Inc., the No. 1 networking equipment company, rose $1.02 to $21.54 the day after CEO John Chambers told analysts that November orders met expectations and that he feels the worst of the business downturn is over.

Software maker Oracle Corp. jumped 11.4 percent, up $1.57 at $15.37, on comments by CEO Larry Ellison, who said there were signs of improvement for the company and that business had stabilized.

QLogic Corp., the biggest advancer in the S&P; 500, has soared 176 percent in the last 10 weeks. It jumped $3.23 yesterday to $56.18. EMC Corp., which spurted 75 cents yesterday to $17.95, has climbed 63 percent from its low Oct. 2.

Among other tech issues, Advanced Micro Devices Inc. advanced $1.34 yesterday to $16.24; Micron Technology Inc. rose $2.57 to $33.06; Dell Computer Corp. added $1.59 to $29.67; and Compaq Computer Corp. rose 86 cents to $11.65.

AOL Time Warner Inc. climbed $1.08 to $35.83 after the world's largest media company announced that its chief executive, Jerry Levin, is stepping down.

Citigroup, the largest U.S. financial services company, rose $1.17 to $49; Morgan Stanley Dean Witter & Co., the No. 2 securities firm, advanced $3.15 to $55.87; and American Express Co. climbed $1.26 to $34.61.

Bloomberg News and the Associated Press contributed to this article.

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