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US Stocks Rally in Final Hour of Thursday Trading


U.S. stocks rallied in the final hour of trading Thursday, although technology remained under pressure. The Dow Jones Industrial Average climbed 114 points higher, more than one percent, to 8,681. The broader Standard and Poor's 500 index moved up 11 points, also one percent. The tech-weighted Nasdaq composite tried to make a comeback but closed fractionally lower, off just a few points.

The latest data show continuing weakness in the U.S. economy. New orders for costly manufactured goods declined in August for the third straight month.

And, jobless claims last week surged to their highest level in nine years. That was no surprise. The numbers take into account job losses in the wake of the September 11 terrorist attack, a lot of them in the New York area.

Market-watcher James Maguire believes investors are starting to cope with the reality of a weaker economy and may start drifting back into the market, even if it is only to look for stocks that will do better in the long run.

"I think overall the market certainly has accepted that the economy is now in a recession, he said. "I don't think there's any further question of that. It's just a matter now of how deep a recession it's going to be, how many quarters is it going to last." Meanwhile, the Nasdaq continues to struggle. No question it has taken the bigger hit in a slower economy. And since the September 11th attack, the Nasdaq has lost about $285-billion of market capitalization.

Nasdaq officials have suspended the rules for being listed on the exchange, at least until January. Normally, companies whose shares fall below a dollar are removed. They will now be allowed to stay.

About 30 percent of Nasdaq companies are trading at new 52-week lows.

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