U.S. stock prices rallied for a higher finish Thursday, after weak economic data kept the market under pressure for the first half of the trading session.
The Dow Jones Industrial Average climbed 117 points, (1.2 percent) to 9,463. The broader Standard & Poor's 500 index gained 15 points (1.3 percent) to 1,100, while the tech-weighted Nasdaq composite went up 2.5 percent, 44 points, to 1,775.
The market got off to a weak start after new data showed orders for durable goods, big ticket items such as washing machines and refrigerators, plunged 8.5 percent in September. Sales of existing homes were also sharply down, more than 11 percent. The numbers suggest the September 11 terrorist attacks caused a major disruption in consumer spending, with many Americans putting off big purchases.
But investors found opportunities in the lower stock prices and jumped in to buy. Analysts think people rallied out of their disappointment by focusing on prospects for an economic recovery next year.
"Today's action is a very strong confirmation of the dynamic which is driving this market, namely, the economic stimulus package that is now working its way through the legislative process, and the anticipated effect it's going to have on this economy," said Market-watcher James MaGuire.
A number of analysts are actually "bullish", that is optimistic, about a rebound for corporate America. Investment strategist Ned Riley says companies will not grow as robustly as before. But he believes many, especially in technology, will recover faster than many analysts predict. "Prosper in the way we've seen them in the past, I don't think that's going to be the case," he predicted. "But prosper relative to the current environment, no doubt about it. I think the earnings bounce-back in 2002 is going to surprise the analysts on Wall Street."
It was a big day for Microsoft, as the software giant launched its new XP Windows operating system. Microsoft chairman Bill Gates promised his new product would re-energize the technology sector. Some industry analysts are predicting it will boost personal computer sales.
Meanwhile, Wall Street Thursday saw more fallout from the events of September 11. American International Group, the largest insurance company, reported its first earnings drop in two years, due to claims resulting from the attacks.
And Northwest Airlines, the fourth largest U.S. air carrier, said its third-quarter profits were down more than 90 percent because of the decline in air travel.