Share this article

print logo


Stocks made their first solid advance in nearly two weeks today as a government report of slower economic growth raised hopes that the Federal Reserve won't raise interest rates next week.

At 3 p.m., the Dow Jones industrial average was up 154.82 at 10,368.30.

Broader stock indicators were also higher. The Standard & Poor's 500 index was up 16.10 at 1,284.47, and the Nasdaq composite index gained 22.89 to 2,753.16.

Stocks rose after the Commerce Department reported that the U.S. economy, weighed down by record trade deficits, saw growth slow to an annual rate of 1.6 percent during the second quarter, the lowest rate of expansion in four years.

The report provided a bit of relief for investors who have driven stocks lower over the past week in anticipation of the Fed's Oct. 5 meeting on interest rates. In a bid to cool the economy's sizzling growth, the Fed has raised rates twice this year and suggested it would do so again if signs of inflation crept into the economy.

Separately, the Labor Department said the number of Americans filing for unemployment benefits last week rose by 25,000 to 299,000, reflecting the impact of Hurricane Floyd.

Traders said some of the buying today was sparked by portfolio managers working to square their accounts for the end of the third quarter. That drew investors to shares that have held up well throughout the quarter, including Hewlett Packard, up 3/4 to 90, and Sun Microsystems, up 2 5/1 6 to 93 7/8 .

The Nasdaq's gains were hemmed in by some of its major technology names. slipped 1/4 to 80 1/2 after rising sharply on Wednesday.

Also, shares of companies that make computer chips tumbled, continuing to suffer from worries that last week's earthquake in Taiwan will hamper production. Applied Materials fell 2 1 1/1 6 to 77 1/1 6.

EBay Inc. rose 4 1/4 to 143 1/4 . The online auctioneer will join the Nasdaq 100 Index Wednesday, replacing Centocor Inc., which is being acquired.

America Online Inc. fell 1 7/8 to 107 3/8 after Reuters reported AT&T Corp. said it isn't in talks to sell its stake in Excite At Home Corp. to America Online. Leo Hindery, president of AT&T's cable and Internet division, told Reuters that "there have been no discussions under way whatsoever."

Advancing issues outnumbered decliners by a 4-to-3 margin on the New York Stock Exchange, where volume came to 605.91 million shares, ahead of Wednesday's pace.

The Russell 2000 index rose 2.39 to 423.91.

There are no comments - be the first to comment