Dow Average Climbs 70.9; Durable Goods and Corporate Profit Reports Fuel Markets' Surge
Emboldened by good economic news and better-than-expected corporate profits, investors woke up from their recent summer siesta yesterday and decided to chase stocks. They drove the Dow Jones industrial average up 70.90 points, nearly 2 percent, to 3846.73, the headiest level since late March. This follows Tuesday's 25-point gain.</br></br>Some market analysts saw the rally as a signal that the bull market is about to resume, while others took a more cautious stance and urged investors to watch and wait before buying in.</br></br>Traders were reacting in part to a stronger dollar and to the Commerce Department's durable-goods report yesterday that showed a 4.2 percent decline in demand for big-ticket items in July. It was the first decline since February.</br></br>Before falling last month, orders for durable goods, the expensive manufactured items that last at least three years, rose 1.2 percent in June after climbing 1.4 percent in April, according to the Commerce Department. Compared with year-ago levels, durable goods orders rose 1 percent in July.</br></br>A rising dollar and declining orders make it less likely, say Wall Streeters, that the Federal Reserve will soon boost short-term interest rates again, which could hurt the economic recovery.