Sun, Mar 14, 2004 - Page 10 News List

US shares rally after earlier sell-offs

STILL DOWN Despite the recovery after shares were down on the news of bombing attacks in Spain, trading still notched up its biggest weekly decline since September

REUTERS , NEW YORK

Traders work on the trading floor at the New York Stock Exchange in the middle of the day on Friday. Stocks rebounded on Friday after four days of heavy losses.

PHOTO: AP

US stocks rallied and the dollar rose on Friday, recovering from a sell-off on Thursday caused by the bombings in Madrid and fears of a possible al-Qaeda link.

But even with Friday's gains, stocks still finished down for the week, suffering their biggest weekly declines since September.

Gold, silver, bonds and oil all fell.

The Spanish government has singled out the Basque separatist group ETA as the prime suspect in the bombings, which killed nearly 200 people, though the group has denied responsibility.

Fears that Islamic radicals linked to Osama bin Laden's al-Qaeda might have been behind Thursday's simultaneous bombings put security forces on alert across Europe and beyond.

"The experts have said that you shouldn't listen to whoever is claiming responsibility or not claiming responsibility," said Philip Dow, director of equity strategy at RBC Dain Rauscher. "The bottom line is, is that it's a horrific event."

Improved outlooks for earnings and brokerage upgrades contributed to Friday's stock market gains.

The Dow Jones industrial average closed up 111.70 points, or 1.10 percent, at 10,240.08. The Standard & Poor's 500 Index ended up 13.79 points, or 1.25 percent, at 1,120.57, while the Nasdaq Composite finished up 40.84 points, or 2.10 percent, at 1,984.73.

For the week, the Nasdaq lost 3.07 percent, the Dow ended down 3.35 percent and the S&P 500 fell 3.14 percent.

"Now we're seeing some buying, some short covering. The Nasdaq is acting better than the Dow because it had more of a sell-off than the other indexes," said Todd Leone, head of listed trading, S.G. Cowen.

International Business Machines Corp helped pull the Dow higher. The stock ended up US$2.09, or 2.29 percent, at US$93.30.

Dell Inc. finished the session at US$33.05, up US$1.06, or 3.31 percent, after J.P. Morgan raised its rating on the second-largest supplier of personal computers to "overweight" from "neutral."

Cisco Systems Inc, the world's largest maker of equipment that directs traffic on the Internet, closed up 79 cents, or nearly 4 percent, at US$23.13 and were the second most actively traded on Nasdaq.

The dollar rose on Friday as investors took profits on gains made in higher-yielding currencies and shrugged off slightly weaker-than-expected US consumer sentiment data.

The University of Michigan's consumer sentiment index showed a preliminary March reading of 94.1, narrowly undershooting February's final reading of 94.4.

"Michigan was slightly disappointing but despite that, we saw the dollar reach fresh highs on the day, proving that the markets over the past couple of days have been paying more attention to technical factors than fundamental ones," said Omer Esiner, market analyst at Ruesch International.

By late afternoon in New York, the euro was down about 0.84 percent at US$1.2216 from US$1.2319. Against the yen, the dollar was trading steady at 110.85 yen.

Against the Swiss franc, which tends to rise in times of geopolitical tension, the dollar rose 1.05 percent to 1.2837 francs. Sterling was down 0.38 percent at US$1.8033, while the Australian dollar fell about 0.8 percent to US$0.7322.

Sterling and the Australian dollar were the hardest hit as investors exited once-lucrative bets on currencies with high interest rates -- often funded with short dollar positions.

Bond prices retreated as an essentially stable reading on US consumer confidence gave bond traders an excuse to sell after a giant rally over the past week.

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