Dow sees industrials and S&P index rise

Wall Street surged ahead today, completing a remarkable 12-month period that saw the major indexes make a stunning rebound from the depths of the three-year-long bear market.

At the close, the Nasdaq composite index had recovered an impressive 71.6% of its value since October 9, 2002, while the Dow Jones industrials were up 32.9% and the Standard & Poor’s 500 index had regained 33.7%.

A Labour Department report suggesting the pace of layoffs has slowed fed the market’s good mood, especially after a spate of mixed economic news in recent weeks.

“Maybe the market is finally believing that this rebound we’ve been seeing is real,” said Jay Suskind, head trader at Ryan Beck & Co. “If things continue to have a sunny outlook, people won’t want to miss it.”

Solid retail sales reports from Wal-Mart Stores, Gap and others contributed to the market’s positive tone, said Jeff Swensen, senior trader at John Hancock Funds.

The Nasdaq rose 18.12, or 1%, to close at 1,911.90. The Nasdaq, the most battered of the market’s major indexes during Wall Street’s three-year slump, last closed higher 19 months ago, on March 11, 2002, when it stood at 1,929.49.

A year ago, on October 9, 2002, the Nasdaq was at a six-year low of 1,114.11.

Today, the Dow advanced 49.11, or 0.5%, to 9,680.01 – its highest close since since June 18, 2002, when the average was at 9,706.12. On October 9 of last year, the Dow stood at a five-year low of 7,286.27.

The S&P 500 index rose 4.95, or 0.5%, to 1,038.73. A year ago, the S&P 500 had fallen to a six-year low of 776.76.

Today the market was cheered by a government report that new claims for unemployment insurance fell last week to their lowest level in eight months. Analysts said a decline in the pace of layoffs could signal companies were more hopeful about the staying power of the economic recovery.

In results issued after the market closed yesterday, biotechnology company Genentech Inc. and Internet search engine Yahoo! Each reported strong earnings, beating analyst expectations.

Genentech saw a 70% jump in profits on strong sales of two cancer-fighting drugs and a one-time legal settlement. The company’s results beat analyst expectations by 2 cents a share. Genentech was up 3.23, or 4.1%, at 81.98 today.

Yahoo doubled its earnings with strong revenue from advertising sales, and beat Wall Street forecasts by a penny a share. Yahoo was up 3.96, or 10.2%, at 42.75.

Wal-Mart rose 44 cents to 58.96 after the retailer reported same-store sales, those from stores open at least a year, rose 6% last month, beating its own expectations and analyst estimates.

Gap Inc, which said same-store sales were up 13% last month, rose 96 cents, or 5.3%, to 19.15.

Same-store sales are considered the best yardstick of a retailer’s strength.

Computer Associates International Inc. was down 3.01, or 10.4% at 25.95 on news the firm had fired three top financial executives in the midst of a government accounting probe. An inquiry by the company’s audit committee found the three had inappropriately recognised sales in advance of signed contracts.

Advancing issues outnumbered decliners 3 to 2 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, a barometer of smaller company stocks, rose 5.66, or 1.1%, to 521.34.