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DOW, NASDAQ UP
IN 1 P.M. TRADING

Wall Street's rally gained momentum today, with stocks rising sharply for the second straight day, this time on Hewlett-Packard's better-than-expected results.

Investors were also cheered by two new economic reports, one of which suggested the employment slump might be easing. The other showed a flat but still stronger-than-expected reading in the Index of Leading Economic Indicators.

At 1 p.m., the Dow Jones industrial average rose 169.90 to 8,792.91, adding to a 148.23 gain the day before. The Nasdaq composite index surged 38.76 to 1,458.11 and the Standard & Poor's 500 index gained 16.07 to 930.22.

H-P rose $2.33 to $19.18, a gain of nearly 14 percent, as investors reacted to the company's earnings report, released late Wednesday, that beat analyst expectations. The technology company also reaffirmed its forecasts for the current quarter.

Microsoft advanced $1.07 to $57.69, while Intel gained $1.10 to $20.25.

Ariba jumped 41 cents to $4.62. Hewlett-Packard runs some of Ariba's products on its server computers as part of a venture with the software maker that lets companies purchase goods on the Internet.

Cisco Systems rose 59 cents to $14.97. Investors yesterday rejected a proposal calling for the world's largest maker of computer-networking equipment to pay a dividend for the first time.

Blue chips also showed strength. Merck rose 87 cents to $58.35 on hopes a vaccine it is helping develop could prevent cervical cancer. Shares of General Electric climbed $1.70 to $26.50 after the conglomerate said it expects 2003 earnings to increase between 3 and 13 percent.

Vivendi Universal SA's U.S. shares gained $1.63 to $13.35. Investors led by oil billionaire Marvin Davis are ready to bid $20 billion for the French company's entertainment assets, the Wall Street Journal Europe said, citing people familiar with the situation.

Halliburton rose $1.18 to $19.26 and Honeywell International gained 75 cents to $23.65. The companies may be closer to settling hundreds of thousands of asbestos lawsuits after this month's Republican election victories, the Wall Street Journal reported.

UAL jumped 53 cents to $3.63. The owner of United Airlines and its machinists union tentatively agreed on concessions to save $1.5 billion over 5 1/2 years, as the last major labor group joined in cost cuts to help the carrier avoid bankruptcy.

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