Shares rise in New York

US stocks rose for a second day as better-than-expected reports on economic growth and Midwest manufacturing boosted investor optimism that corporate profits will recover.

"There's underlying strength in the economy, and that's supporting equities," said Charles White, president of Avatar Associates, which oversees $1.7 billion.

Intel Corp led the advance after a Lehman Brothers Inc analyst said the world's largest semiconductor maker is benefiting from increased demand overseas and higher prices.

The Standard & Poor's 500 Index rose 3.87, or 0.5 percent, to 841.15. Computer-related stocks contributed half the gain. The Dow Jones Industrial Average climbed 6.09, or 0.1 percent, to 7,891.08.

The NASDAQ Composite Index added 13.58, or 1 percent, to 1,337.52.

Friday's economic reports helped offset concern about a likely war with Iraq that drove the S&P 500 to a third straight monthly decline. The benchmark fell 1.7 percent in February, extending its year-to-date drop to 4.4 percent.

For the week, the S&P 500 lost 0.8 percent, the Dow 1.6 percent and the NASDAQ 0.9 percent.

Gross domestic product grew at a 1.4 percent annual rate in the fourth quarter as consumer and business spending was higher than originally estimated, the Commerce Department said. The increase in GDP, the total value of all goods and services produced in the US, was twice as fast as the 0.7 percent pace reported last month.

Stocks reached their highs for the day after the report on Chicago-area manufacturing and a better-than-expected reading consumer sentiment.

Intel rose US$0.56 to US$17.26. Lehman analyst Daniel Niles boosted his first-quarter profit forecast by one penny to 13 cents a share and lifted his 2003 target to US$0.63 from US$0.60. He rates the stock "overweight." Computer-related shares gained with Intel. Microsoft Corp, the world's largest software maker and most-valuable company, added US$0.12 to US$23.70. Cisco Systems Inc, the biggest maker of computer-networking equipment, advanced US$0.23 to US$13.98. Dell Computer Corp, the No. 2 personal-computer maker, climbed US$0.45 to US$26.96.

Three stocks rose for every two that fell on the New York Stock Exchange while advancing and declining shares were about even on the NASDAQ Stock Market.

Some 1.31 billion shares traded on the Big Board, in line with the three-month daily average. More than 1.34 billion shares changed hands on the NASDAQ.

Some investors are skeptical that the economy is rebounding enough to propel shares much higher.

"I suspect that some of the January and February data will show anemic growth," said Dean Gulis, who helps oversee US$65 billion at Loomis, Sayles & Co in Bloomfield Hills, Michigan.

"We are unlikely to really see a sustained rally. It will depend on a recovery and does that translate into growing profits."

Gap Inc, the largest US clothing retailer, dropped US$1.78 to US$13.04. Banc of America Securities analyst Dana Cohen said the shares are expensive following a 60 percent climb from their low in October. She lowered her recommendation to "neutral" from "buy." First Horizon Pharmaceutical Corp, which makes drugs to treat chronic diseases, tumbled US$3.74 to US$2.06. The company slashed its earnings forecast by almost 75 percent on slower sales of its Sular high-blood-pressure drug and Tanafed DP pediatric cold medicine.