Dow continues trek toward 10,000

AP Business WriterNEW YORK (AP) -- The Dow Jones industrials came a step closer to 10,000 Monday, managing a solid rally as reports of U.S. military victories in Afghanistan increased hopes that the worst is over for the market.

The index has now risen 21 percent from its 2001 low on Sept. 21, meeting the technical definition of a bull market, but many analysts doubt the momentum will last. They note that most of the gains represent the rebound from the selloff that followed the Sept. 11 terror attacks, rather than buying on concrete indications that business is turning around.

"The market's got a positive tone here, but it's not really running on rocket fuel," said Jon Brorson, director of equities at Northern Trust. "I wouldn't be surprised if the market falls back from here."

The Dow closed up 109.47, or 1.1 percent, at 9,976.46 -- just 23.54 below the 10,000 level it last held Sept. 5. It has risen 21.1 percent since Sept. 21, when it reached a lot for the year of 8,235.81.

Broader stock indicators also did well. The Nasdaq composite index advanced 35.84, or 1.9 percent, to 1,934.42, within striking distance of the 2,000 milestone not seen since Aug. 7.

The Standard & Poor's 500 index rose 12.41, or 1.1 percent, to 1,151.06, its best finish since Aug. 28, when the index stood at 1,161.51.

Stocks have been advancing gradually as the market recovered from the selloff that followed the attacks. Earlier this month, the Federal Reserve cut interest rates for the 10th time this year, in a move designed to stimulate business by making it cheaper to borrow money to expand.

More recently, news in the last week that the Taliban government was retreating in Afghanistan has cheered investors and professional money managers, who had been keeping large amounts of cash on the sidelines for fear that the uncertainty would cause stocks to fall again.

Wall Street is also happy about falling energy prices. Cheaper oil and gas bills mean consumers, whose spending accounts for two-thirds of the economy, have more money to spend on other goods and services.

In trading Monday, financial stocks, thought to be an early leader in a market turnaround, were higher. American Express rose $1.07 to $34.20.

Technology stocks also advanced. Microsoft advanced 79 cents to $66.54.

Phillips Petroleum rose $1.53 to $53.35 on word it is merging with Conoco in a $15.4 billion stock deal. Conoco climbed $1.68 to $25.98.

Alcoa gained $1.37 to $38.49 after announcing 6,500 job cuts and a plant closure to improve efficiency.

Despite the market's rise, analysts say investors are well aware the economy remains weak. Third-quarter earnings reports were dismal and few companies have offered any indications that their business is improving.

The Commerce Department reported Monday that housing construction in October declined by 1.3 percent from September -- a sign that sagging consumer confidence and the weak economy have builders playing it safe.

"I think it's too early to tell whether the economy is really improving. I think we may be a little ahead of ourselves here," said Bill Barker, investment strategy consultant at RBC Dain Rauscher. "You're beginning to get a little more confidence from some companies, but the optimism is not widespread."

Advancing issues led decliners 3 to 2 on the New York Stock Exchange. Trading was moderate ahead of the Thanksgiving holiday. Volume came to 1.29 billion shares, compared with 1.35 billion at the same point Friday.

The Russell 2000 index rose 6.40, or 1.4 percent, to 457.71.

Overseas, Japan's Nikkei stock average rose 0.7 percent. In Europe, Germany's DAX index climbed 2.4 percent, Britain's FT-SE 100 advanced 0.9 percent, and France's CAC-40 gained 1.6 percent.

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