Wall Street report: Tuesday close
THE flight of Taliban forces from Afghanistan's capital encouraged the bulls on Wall Street, driving stocks sharply higher. The blue-chip Dow Jones Industrial Average closed up 196.58 at 9,750.95, while the tech-heavy Nasdaq gained 51.98 to 1892.11.
Relief that Monday's jetliner crash in New York appeared to be an accident and not the result of terrorism added to the upbeat mood. The news developments boosted the confidence of investors, with a growing number buying on the belief that the market has reached bottom, analysts said.
'If you miss the first month of a bull market you leave a lot of performance on the table. That's what I think you're seeing. People are acknowledging that this bottom might be for real,' said Mitch Stapley, chief fixed income officer at Fifth Third Bank in Grand Rapids, Michigan. 'They're afraid of being left behind.'
Analysts said the market - which has rebounded to pre-11 September levels in recent weeks - was encouraged by what it saw as signs of progress in the fighting in Afghanistan. Opposition forces arrived in the capital, Kabul, and Taliban troops left, possibly heading for the mountains to continue their fight.
'We've been talking in the past couple of weeks about 10,000 and 2000,' as targets for the Dow and the Nasdaq, said Scott Bleier, chief investment strategist at Prime Charter in New York. 'We've been thinking about that for the end of the year, but the way things are going we may get there before that. I think things going well in Afghanistan helps the psychological picture.'
Investors also took note of the investigation into Monday's American Airlines jet crash in New York. Authorities said it appeared so far to be an accident, although they did not rule out sabotage.
The optimism fuelled strong buying in technology stocks despite a statement on Monday from Oracle chief executive Larry Ellison that his company's earnings in the current quarter were set to disappoint. Oracle fell 88 cents to $14.52.
But investors found good news in Texas Instruments, which said the third quarter would mark the low point for semiconductor orders and that it expected to meet fourth-quarter expectations. The shares rose $1.92 to $33.82.
Other gainers included Home Depot, which rose $2.88 to $44 after reporting third-quarter earnings that met analysts' forecasts.
AMR, parent of American Airlines, saw its shares rise 52 cents to $17.01. General Motors shares rose $2.60 to $44.99 after the automaker named Robert Lutz chairman of its industry-leading North American operations.
Losers included Watson Pharmaceuticals, which fell $18.61 to $28.54 after reporting a third-quarter loss, facing stiff competition from other generic drug makers. Wal-Mart, which reported earnings that met expectations, nevertheless saw its shares fall 58 cents to $55.
