Newspaper article THE JOURNAL RECORD

Stock Prices Rebound

Newspaper article THE JOURNAL RECORD

Stock Prices Rebound

Article excerpt

NEW YORK (AP) -- Stock prices finally settled on solid gains Wednesday after investors spent a wobbly session perplexed by another batch of mixed signals about the economy and earnings.

Buyers deemed a better-than-expected report on the economy to be a plus. But sellers fretted over the latest string of analysts' downgrades of high-profile companies.

The Dow Jones Industrial Average finished up 50.66 at 10,647.33, bouncing back from several dips into negative territory.

The market's broader indicators followed the same path. The Nasdaq Composite index rose 38.58 to 2,031.24, while the Standard & Poor's 500 index advanced 10.56 to 1,223.14.

Investors were feeling somewhat optimistic after hearing that the Conference Board's Index of Leading Economic Indicators, a key forecasting gauge, rose 0.5 percent in May. The reading was better than the 0.3 percent analysts were expecting and a sign that the economy is poised to slowly recover.

Meanwhile, investors were evaluating testimony by Federal Reserve Chairman Alan Greenspan before the Senate Banking Committee. The market was hoping Greenspan would indicate whether the Fed will lower interest rates as expected for the sixth time this year when it meets next Tuesday and Wednesday.

Greenspan didn't mention rates, but he did say the weakened economy has caused an increase in bad loans, which in turn has made bankers more cautious about lending. He also noted weakness in several industries: health care, telecommunications, retailing, manufacturing and California utilities.

"He is saying what we need to hear," said Arthur Hogan, chief market analyst at Jefferies & Co.

But the prospect of lower interest rates isn't enough for skittish investors, according to analysts, who said there needs to be proof that business has improved before buyers really return to Wall Street.

"Most investors right now are all from Missouri," known as the Show-Me State, said Joe Keating, chief market strategist for Fifth- Third Bancorp. "Investors are looking to actually see the rebound in the economy, see it gain some traction and see that it is firmer."

Some of blue chips' biggest gains came from safer sectors -- a sign that investors remain nervous about the economy and the market - - including pharmaceuticals and financials. …

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