- Scott City man dies in motorcycle crash near Millersville (8/13/17)
- Sands Pancake House moving to Morgan Oak location (8/11/17)1
- Cape movie theater to feature recliners, new food and drink options (8/11/17)3
- Stoogefest headliner cancels, cites NAACP travel advisory in Missouri (8/15/17)2
- Teen convicted of shooting area woman in 2015 (8/13/17)
- Man accused of making terror threats against dental office (8/13/17)
- Councilman: Scott City mayor, city administrator resigned (8/15/17)4
- Judge hears Mosby's formerly suppressed confession at Robinson hearing (8/9/17)
- $34 million student housing project on schedule, developer says (8/14/17)2
Stocks rise sharply on housing report, stronger earnings
AP Business WriterNEW YORK (AP) -- A strong jump in November housing construction propelled stock prices to sharp gains Tuesday and fueled investors' hopes that the economy is improving.
Better-than-expected earnings from electronics retailers Best Buy and Circuit City also contributed to the market's advance. Combined with the housing report, the news improved investors' outlook for the economy, two-thirds of which is comprised of consumer spending.
"There are a lot of reasons to be optimistic," said Thomas F. Lydon Jr., president of Global Trends Investments in Newport Beach, Calif. Among them, he said, are the year's 11 interest rate cuts and companies' improved earnings results and projections.
The Dow closed up 106.42, or 1.1 percent, at 9,998.39, according to preliminary calculations. The Dow advanced 80 points Monday.
The broader market also advanced sharply. The Nasdaq rose 17.30, or 0.9 percent, to 2,004.75. Throughout this month, the Dow and Nasdaq have traded just above and below 10,000 and 2,000 respectively, and until December had not risen above those marks since before the Sept. 11 terror attacks.
Wall Street's broadest measure, the Standard & Poor's 500 index gained 8.56, or 0.8 percent, to 1,142.92.
Investors, who have been looking for evidence of an economic recovery, welcomed the Commerce Department's report that housing construction rose 8.2 percent in November. The increase was bigger than analysts were expecting and brought housing starts to their highest level since July as builders bet that low mortgage rates would continue to attract buyers.
Home builders posted healthy gains, led by Lennar, which soared $2.75 to $44. Lennar said its fourth-quarter earnings estimates will exceed Wall Street's forecast by 25 percent.
Other winners included Best Buy, which rose $3.55 to $72.55 on fiscal third-quarter earnings that were 40 percent higher than the same period last year and beat analysts' expectations by a penny a share. Competitor Circuit City, which also posted better-than-expected profits, inched up 16 cents to $23.86.
Also on the upside, General Electric rose $1.42 to $39.72, having reaffirmed late Monday its fourth-quarter and 2001 earnings expectations. DuPont advanced $1.10 to $43.22 following an upgrade by Merrill Lynch.
In technology, IBM gained 86 cents to $122.20, while Ciena rose 56 cents to $15.47.
"There are some great companies that are available at great discounts compared to where they were a year ago," Lydon said.
Analysts said the buying was also attributable to the likelihood that companies will have an easy time posting improved profits over this year, which marked the worst profit decline since 1991.
"The third and fourth quarters of next year are going to look better than this year -- there is an 80 percent certainty of that," said Scott Bleier, chief investment strategist at Prime Charter Ltd.
Since late September, investors have been buying up stocks on increasing hopes that the economy will turn around next year. The rallies have brought the market's major indicators well above their lows for the year, which they hit on Sept. 21 following a precipitous drop that resulted from the Sept. 11 terror attacks.
The Dow is 21.4 percent above its low of 8,235.81. The Nasdaq is up nearly 41 percent from its low; the S&P 500, up 18.3 percent.
Still, the market will suffer periodic weakness as investors are reminded that the first two quarters of 2002 will be difficult for many companies, Bleier added.
Advancing issues outnumbered decliners slightly more than 3 to 2 on the New York Stock Exchange. Volume was heavy.
The Russell 2000 index, which tracks smaller company stocks, rose 5.54, or 1.2 percent, to 485.48.
Overseas, markets were mixed Tuesday. Japan's Nikkei stock average closed with a gain of 1.1 percent. In Europe, France's CAC-40 slipped 0.1 percent, Germany's DAX index fell 0.6 percent and Britain's FT-SE 100 rose 0.3 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com