wall street - the rally powers on

Dow Erases 2005 Loss as U.S. Stocks Extend Fourth-Quarter Rally

Nov. 21 (Bloomberg) -- The Dow Jones Industrial Average erased its loss for the year as U.S. stocks, led by Boeing Co., extended their fourth-quarter rally. The latest gain followed a report that showed the economy is improving.

``The issue going forward is can the economy keep growing, and I think the answer to that is yes,'' said Alan Kral, who helps manage $750 million at Trevor Stewart Burton & Jacobson Inc. in New York. ``Earnings will continue to grow and the market can continue to perform.''

Boeing had the biggest advance in the Dow average after announcing $17 billion in plane orders. The contracts increased the odds that it will receive more business than Airbus SAS this year for the first time in five years.

The industrials added 53.95, or 0.5 percent, to 10,820.28 to show its first gain for the year since March. The 30-stock gauge, which declined as much as 7.2 percent in 2005, has risen for the past four weeks.

Stocks climbed after the Conference Board's index of leading economic indicators rose for the first time in four months. The report followed statistics last week that showed manufacturing and retail sales grew more than forecast and inflation slowed.

The S&P 500 rose 6.58, or 0.5 percent, to 1254.85, its highest since June 2001. The Nasdaq Composite Index added 14.60, or 0.7 percent, to 2241.67.

The Dow average, now up 0.3 percent for 2005, is 2.4 percent higher this quarter. The S&P 500 has advanced 2.1 percent since Sept. 30 and the Nasdaq has jumped 4.2 percent. History suggests the market may maintain the gains through the rest of the year. The S&P 500 has risen during the fourth quarter for nine of the past 10 years.

`The Range'

``We're certainly through the top end of the range that we've been in for quite some time, so I think that bodes well for the end of the year,'' said Frank Childress, head of Nasdaq trading at A.G. Edwards & Sons Inc. in St. Louis.

About nine stocks rose for every four that fell on the New York Stock Exchange. Some 1.55 billion shares changed hands on the Big Board, 5.2 percent less than the three-month average. Trading may slow further as the week progresses because the NYSE will be closed on Nov. 24 for the Thanksgiving Day holiday and will shut three hours early the next day.

A report showed an index of leading economic indicators rose in October by 0.9 percent. Job growth and a recovery by companies in the South damaged by three hurricanes were behind the increase. The Conference Board's gauge, measuring the likely performance of the economy in the next three to six months, was expected to increase 0.8 percent, according to economists in a Bloomberg News survey.

Boeing

Boeing gained $2.05, or 3.1 percent, to $69. The world's second-largest commercial aircraft maker announced orders for 138 planes in two days from countries such as China and companies including International Lease Finance Corp.

Industrial shares increased 0.7 percent and were the second- biggest contributor to the S&P 500's gain among 10 industry groups. General Electric Co., which sells products from jet engines to medical imaging equipment, added 45 cents to $36.20. The company on Nov. 18 raised its profit forecast and increased a share-buyback program to $25 billion.

Energy shares rallied 2.1 percent for the best performance in the S&P 500. Crude oil for January delivery gained 0.9 percent to $57.70 a barrel in New York as forecasts for colder weather stoked expectations energy demand will climb.

Exxon Mobil Corp., the world's biggest publicly traded oil company, jumped $1.12 to $59.37. ConocoPhillips, the No. 3 U.S. oil company, increased $2.02 to $64.25. Crude prices have fallen 19 percent from a record $70.85 a barrel on Aug. 30.

American Express

American Express Co. rose 99 cents, or 2 percent, to $50.90, for the second-largest advance in the Dow average. Shares of the No. 4 U.S. credit-card issuer may benefit as an increase in the number of transactions offsets a drop in fees, wrote Eric Wasserstrom, an analyst at UBS AG. He lifted his rating on the stock to ``buy'' from ``neutral.''

General Motors Corp. gave up initial gains, falling 47 cents to $23.58. The world's largest automaker, which posted $4.8 billion in losses in the first three quarters of the year, will close 12 North American facilities and slash 30,000 jobs. GM will idle or reduce operations at nine manufacturing plants and three non-manufacturing sites, Chief Executive Rick Wagoner said at a press conference in Detroit. GM shares on Nov. 17 touched their lowest level since 1987. They climbed as much as 3.7 percent today after the job cuts were announced.

`Long Way'

``In a sense, all it does is emphasize the seriousness of the issues that GM faces,'' said Dean Gulis, who helps manage $2.5 billion at Loomis Sayles & Co. in Bloomfield Hills, Michigan. ``Maybe we're at the point where we're getting close to stopping the bleeding, but there's still a long way to go.''

A gauge of technology stocks added 0.1 percent, the worst performance among 10 industry groups in the S&P 500, as a plunge in Computer Sciences Corp. dragged down the shares.

The stock slumped $6.47, or 12 percent, to $48.38. Lockheed Martin Corp. and three private-equity firms ended buyout talks because the No. 5 U.S. computer-services company didn't want to split up as proposed, the Washington Post and the Wall Street Journal reported in the past two days. Lockheed added $1.22 to $61.18.

Computer Sciences spokeswoman Janet Herin and Lockheed's Thomas Greer both said their companies had no comment.

Medicis Rallies

Medicis Pharmaceutical Corp., which is trying to buy Inamed Corp., jumped $3.82 to $31.57. The company received a $2.2 billion unsolicited bid from Mentor Corp., a maker of plastic- surgery products. Medicis makes treatments to fill out lips and smooth wrinkles. Mentor shares slumped $4.79 to $51.35.

Campbell Soup Co., the only S&P 500 company that reported earnings today, rose $1.27 to $30.97. The world's biggest soupmaker said first-quarter profit excluding some items was 58 cents a share, exceeding the 55 cents expected by Wachovia Securities LLC analyst Jonathan Feeney. The company's profit margins expanded for the third consecutive quarter.

Symantec Corp., the world's No. 1 maker of anti-virus software, lost 47 cents to $17.96. Symantec's consumer security business, its most profitable and fastest growing, is set to lose market share to competitors, said Bear Stearns & Co. analyst John DiFucci in a note. DiFucci rated the shares ``underperform'' in new coverage.

SanDisk Corp., the largest maker of flash-memory cards for electronics, tumbled $9.36, or 17 percent, to $46.84, its steepest one-day drop in more than a year. The shares fell after Micron Technology Inc. and Intel Corp. said they will form a company called IM Flash Technologies LLC to produce flash memory chips.

Nike Inc., the world's biggest athletic-shoe maker, fell $1.26 to $86.44. Nike's earning growth may slip as the company's ability to increase its market share approaches its limit, said JPMorgan analysts Robert Samuels and Ronald R. Clark in a note. The analysts cut the stock to ``neutral'' from ``outperform.''

Spiders, QQQQs

S&P 500 shares, called Spiders, advanced 63 cents to $125.76. Nasdaq-100 tracking shares, known by their QQQQ symbol, added 10 cents to $41.55.

S&P 500 futures expiring in December climbed 6.80 to 1257 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures increased 8.50 at 1691.50.

The Russell 2000 Index, a benchmark for companies with a median market value of $563 million, rose 1 percent to 678.96. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, gained 74.35, or 0.6 percent, to 12,543.34. Based on the changes in the Wilshire, the value of stocks increased by $92.9 billion.