Sun, Mar 09, 2003 - Page 10 News List

Stocks rise following Bin Laden report

US EQUITIES Share made a comeback after a report said two of the wanted man's sons were caught, reducing and earlier drop on unexpected job losses

BLOOMBERG , NEW YORK

S&P 500 futures traders Eric Smith, center left, and Gary Polisner, center right, follow the markets near the end of trading at the Chicago Mercantile Exchange on Friday.

PHOTO: AP

US stocks rose as a report that two sons of Osama bin Laden had been captured triggered a rebound from initial losses.

Share prices fell after the economy unexpectedly lost jobs last month and Intel Corp said first-quarter sales wouldn't meet its highest forecast. They moved higher even though the White House said it couldn't confirm the Associated Press report on the al-Qaeda leader's sons.

"Everything is hinged on anything related to terrorism, bin laden, or Iraq," said Michael O'Hare, head of listed trading at Lehman Brothers Inc, the world's fourth-biggest securities firm. "Any positive piece of news and the market's going to fly."

Anything negative, and it's going to drop."

The Standard & Poor's 500 Index rose 6.79, or 0.8 percent, to 828.89. Consumer-related shares such as Wal-Mart Stores Inc contributed more than a quarter of the gain. The Dow Jones Industrial Average climbed 66.04, or 0.9 percent, to 7,740.03.

The NASDAQ Composite Index added 2.40, or 0.2 percent, to 1,305.29. Declines in computer-related shares such as Intel limited the advance.

All three measures nevertheless slid for a second week as the threat of a US-led war against Iraq undermined consumer confidence and prompted some businesses to delay investing and hiring. The S&P 500 lost 1.5 percent, the Dow shed 1.9 percent and the Nasdaq dropped 2.4 percent.

Shares sank to the day's lows in the first five minutes of trading after the Labor Department said the economy lost 308,000 jobs in February, the most since November 2001. Economists surveyed by Bloomberg had expected an increase of 10,000 jobs on average. The unemployment rate rose to 5.8 percent from 5.7 percent, in line with forecasts.

Major markets

* The Standard & Poor's 500 Index rose 6.79, or 0.8 percent, to 828.89.

* The NASDAQ Composite Index added 2.40, or 0.2 percent, to 1,305.29.

* The Dow Jones Industrial Average climbed 66.04, or 0.9 percent, to 7,740.03.


Reports about the bin Laden sons later drove some investors to close out "short" positions they had created by selling shares they didn't own. These money managers had bet the stocks would decline, allowing them to repurchase the shares at a lower price.

If bin Laden is captured "over the weekend, we will have a strong rally Monday morning and it will be too late" to reverse those bets, said Jeff Swensen, a trader at John Hancock Advisors, which manages about US$29 billion in Boston.

President George W. Bush yesterday said the US will seek a vote by the UN Security Council authorizing force to disarm Iraq and is prepared to act without the UN's blessing if it loses. Chief weapons inspector Hans Blix told the council that pressure from other counties has helped monitors gauge the progress of Iraq's disarmament.

Five stocks rose for every four that fell on the New York Stock Exchange while nine declined for every eight that advanced on the NASDAQ Stock Market.

Some 1.37 billion shares traded on the NYSE, 4.7 percent above the three-month daily average. Almost 1.43 billion changed hands on the Nasdaq.

Retailers gained after US consumer borrowing unexpectedly rose in January at a 9.2 percent annual rate, the fastest pace since November 2001. Households added to credit-card debt and took out more loans for automobiles, a Federal Reserve report showed.

Wal-Mart, the world's biggest merchant, added 72 cents to US$48.12. Target Corp, the second-largest discount retailer, advanced 69 cents to US$26.75.

Some investors said they've been adding to their share holdings on the expectation that stocks are near the bottom.

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