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US stocks rally after data boosts optimism
( 2003-09-19 09:01) (Agencies)

U.S. Stocks rallied on Thursday, pushing the blue-chip Dow to its highest level in 15 months, after a batch of positive economic data bolstered Wall Street's optimism that the economic recovery is picking up speed and will help fatten up corporate profits.

At midday on Thursday, the Philadelphia Federal Reserve Bank said its measure of factory conditions in the highly industrialized U.S. mid-Atlantic region fell below forecasts, but still showed decent growth. The survey's six-month outlook rose to its best level in more than a decade.

Earlier, before the opening bell, the government said weekly jobless claims fell in the last week, down 29,000 to 399,000, which was better than Wall Street expected. But the widely watched four-week moving average -- seen as a more accurate gauge of unemployment than the more volatile weekly figure -- moved higher, tempering optimism over the new claims number.

In other economic readings, the Conference Board, a private research firm, said its index of leading indicators rose 0.4 percent in August, its fourth straight month of gains.

Taken together, the reports added to evidence that the economic recovery is picking up steam, analysts said. The U.S. economy is expected to grow close to 6.0 percent in the third quarter.

The Dow Jones industrial average ended up 113.48 points, or 1.19 percent, at 9,659.13, its highest close since June 2002, according to the latest available data. The broader Standard & Poor's 500 Index gained 13.61 points, or 1.33 percent, to 1,039.58, also its highest finish since June last year. The technology-laden Nasdaq Composite Index added 26.45 points, or 1.4 percent, to 1,909.55, its highest close since March 2002.

"The general trend in the market has been up because the economy has been showing strength and the data today was pretty good," said Peter Dunay, chief market and options strategist at Wall Street Access.

Though the jobs market remains weak, "momentum is carrying things forward as investors assume the economy is going to be so strong that it'll translate into strong gross domestic product numbers and push up earnings," Dunay said.

Volume was active, with about 1.49 billion shares changing hands on the New York Stock Exchange, and roughly 2 billion shares traded on the Nasdaq. Advancers beat out decliners by a ratio of about 22 to 11 on the Big Board, and by 5 to 3 on the Nasdaq.

Financial sector stocks led gainers, helped by Bear Stearns Cos Inc. after the investment bank reported earnings that blew past Wall Street estimates. Bear, the No. 6 U.S. brokerage, said its third-quarter profit nearly doubled, driven by strength in its bond business. Shares of Bear Stearns rose $3.73, or 5.15 percent, to $76.20.

Shares of American Express Co surged to a 2-1/2-year high of $47.26 during the session after a court ruling that could eventually let it issue cards through banks that are members of its rivals Visa and MasterCard. American Express led the Dow's percentage gainers. The stock ended at $47.08, up $1.73 or 3.81 percent, pushing the S&P financial index up 2.38 percent.

On the Nasdaq, Microsoft Corp. shares rose $1.00, or 3.51 percent, to $29.50. The top U.S. software maker said it would boost the number of board directors to 10 from eight, part of a push to strengthen its corporate governance controls.

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