Tulsa World: Dow back above benchmark 10,000

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Dow back above benchmark 10,000
The surge was powered by a wave of good news.

By TIM PARADIS Associated Press
Published: 11/6/2009 2:23 AM
Last Modified: 11/6/2009 5:39 AM

NEW YORK — A bright forecast from Cisco Systems and upbeat economic news sent stocks soaring Thursday and propelled the Dow Jones industrials back above 10,000.

The rally, coming a day before the government's October employment report, showed that investors are regaining their optimism about an economic recovery.

The Dow bolted up 203 points, or 2 percent, while the Nasdaq composite index, led by Cisco's outlook, rose nearly 2.5 percent. The market's move continued a streak of volatility that began last month, but this latest surge was powered not by a single event, but by a wave of good news:

Cisco Systems Inc. boosted hopes for the technology industry after the largest maker of computer-networking gear forecast revenue growth for the first time in a year.

The forecasts of CEO John Chambers carry big weight on Wall Street and his announcement that the company would begin hiring workers injected a jittery market with confidence.

The government said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January, and is fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.

Worker productivity jumped by the most in six years, rising 9.5 percent in the July-September quarter. The government figures drove hopes that lower costs would boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire.

Retailers had higher sales for the second straight month in October after more than a year of sliding.

The retail industry posted a 2.1 percent sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.

The reports gave investors a shot of optimism about the government's monthly report on employment Friday, which will steer trading because of the ties between joblessness and consumer spending. Analysts say spending must increase for the economy to have a sustained recovery. Economists project that the unemployment rate rose to 9.9 percent in October.

"The news coming in has been for the most part better than expected," said Mike Boyle, senior vice president and portfolio manager at Advisors Asset Management.

The Dow rose 203.82, or 2.1 percent, to 10,005.96, its first close above 10,000 since Oct. 22, and 86 points below its high of the year.

It was the sixth time in 2009 that all 30 stocks in the index rose and it was the biggest advance since a gain of 257 points on July 15, when computer chip maker Intel Corp. said business was improving.

The broader Standard & Poor's 500 index rose 20.13, or 1.9 percent, to 1,066.63, its fourth straight gain.

The Nasdaq rose 49.80, or 2.4 percent, to 2,105.32, its biggest gain since a 2.5 percent spike on July 23.

The Russell 2000 index of smaller companies rose 18.03, or 3.2 percent, to 581.15. By TIM PARADIS Associated Press

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