Investors sustain stocks' rally

By Adam Geller The Associated Press

NEW YORK — Investors set aside disappointing employment data and lackluster retail-sales reports yesterday, limiting their profit taking in a market that eked out incremental gains and kept stocks at their highest levels in months.

The gains, albeit small, sustained a rally that drove the Dow Jones industrial average Wednesday to its first close above 9,000 in more than nine months. The Dow finished virtually even yesterday, but the number of advancing issues significantly outnumbered decliners.

The Dow closed up 2.32 points, essentially unchanged, at 9,041.30. That followed a rise of more than 100 points on Wednesday, when it closed above 9,000 for the first time since Aug. 22, 2002.

Microsoft, one of the 30 Dow stocks, slid 78 cents to $24.09 per share following news of Microsoft Chief Executive Steve Ballmer's e-mail to employees outlining the dangers of dissatisfied customers and free software such as Linux.

Boeing, also a Dow stock, added 13 cents to $33.68.

The broader market also finished higher.

The Nasdaq composite gained 11.36 to 1,646.01. The Nasdaq is trading at levels not seen in 13 months.

The Standard & Poor's 500 index was up 3.90 to 990.14. The S&P is at levels not seen since last July.

At the end of trading yesterday, the Dow had risen 20.2 percent, the Nasdaq had gained 29.5 percent and the S&P had climbed 23.1 percent since March 11.

Analysts said that despite the limited nature of yesterday's gains, the fact that there was not a broader sell-off indicates a growing sentiment by investors that the market is rebounding.

"We've been in a long and deep bear market and investors feel like the worst is over, and what appeals to them more than anything is some of the stocks that have gotten hit the worst," said Richard Cripps, chief market strategist for Legg Mason of Baltimore.

Investors have been encouraged by better-than-expected first-quarter earnings, signs of economic improvements and upbeat assessments of the economy by Federal Reserve Chairman Alan Greenspan.

"People are anticipating that the economy is going to continue to grow — slowly, but nonetheless we are coming up from a very depressed level," said Richard Dickson, senior market strategist at Lowry's Research Reports in Palm Beach, Fla.

Even so, investors remain cautious ahead of the government's release today of May jobless figures.

"You have to see strong numbers for us to be convinced that the economy is in a true comeback and not just going up on air," said Stephen Carl, head of equity trading at The Williams Capital Group.

Gold/oil

In U.S. trading, gold soared $5.90 to $369.50 per ounce after the European Central Bank slashed interest rates and the euro rebounded in a rally that made dollar-priced bullion cheaper to European investors.

Oil surpassed $30 per barrel yesterday as OPEC producers Saudi Arabia and Venezuela prepared to seek assurances from nonmember Mexico that it would follow the cartel in any move to tighten supply. The three will meet today. In U.S. trading, oil gained 61 cents to $30.34 per barrel.