NEW YORK, (Reuters):
UNITED STATES stocks rose yesterday, with the Standard & Poor's 500 Index hitting a 16-month high, while the dollar strengthened after a European official said efforts to push the greenback lower were not aimed at the European currency.
U.S. trading of Treasuries was closed due to the Columbus Day holiday.
Stocks rose on investors' optimism that third-quarter earnings reports, which have started to flow in, will be stronger than expected.
"We've had a little over 40 names in the S&P 500 report, and profits have been stellar, to say the least," said Francis Gannon, senior portfolio manager at AIG SunAmerica Asset Management.
The blue-chip Dow Jones industrial average rose 89.70 points, or 0.93 per cent, to 9,764.38, and the broader S&P index gained 7.29 points, or 0.70 per cent, to 1,045.35. The two gauges posted their highest closes since June 2002. The technology-laced Nasdaq Com-posite Index advanced by 18.22 points, or 0.95 per cent, to 1,933.53, its highest finish since January 2002.
Motorola, the world's number two mobile phone maker, posted a quarterly profit twice Wall Street's estimate and forecast stronger-than-expected sales in its current fourth quarter. Its shares rose US$0.08 to US$13.87.
DOLLAR BOUNCES BACK
Manufacturing conglomerate Honeywell International Inc. led the Dow in gains, up US$1.27, or five per cent, at US$28.77.
The dollar had been declining since late last month after officials from the Group of Seven rich nations talked down the greenback's value, particularly against Japan's and China's currencies, and called for more exchange-rate flexibility to help iron out global economic imbalances.
Yesterday, the head of the European Central Bank said the efforts were not directed at Europe's single currency, which has been rising against the dollar and threatening to choke off European exports.
"There was no statement specifically about euro/dollar, that was maybe misunderstood," European Central Bank President Wim Duisenberg told reporters on the sidelines of a news conference in Moscow, Russia.
Yesterday afternoon trading, the euro was down 0.90 pe rcent at US$1.1692. The dollar rose 0.3 per cent against the yen to 108.93 yen.
Duisenberg's clarification sent the single European currency down more than one per cent against the dollar and the yen. The euro last week had vaulted to its highest since mid-June against the dollar.
