Stocks Rebound on Bush Tax-Relief Plan

Stocks managed to rebound late Friday as President Bush' call for a tax-relief program of at least $60 billion offset the impact of warnings from tech bellwethers and a worrisome U.S. employment report.

The blue-chip Dow Jones industrial average rose 58.89 points, or 0.65 percent, to 9,119.77, and climbed 3.1 percent this week.

Erasing an early decline, the Nasdaq Composite Index wrapped up its fourth straight day of gains, finishing Friday's session up 7.99 points, or 0.5 percent, at 1,605.30. The technology-packed index, battered after it reopened two weeks ago, rose 7.1 percent for the week, its biggest weekly rise since April, according to

The Standard & Poor's 500 Index closed up 1.75 points, or 0.16 percent, at 1,071.38, and rose nearly 3 percent for the week.

Bush urged Congress to pass tax relief that would at least equal the $60 billion already earmarked in emergency spending to cushion the blow to the economy from the Sept. 11 attacks.

"It's reassuring to the market," said Peter Coolidge, managing director of equity trading at Brean Murray & Co. "Today's comments reinforce the hope of the markets that we will get a quick, significant stimulus package passed that will give the economy a needed shot in the arm."

The gloom cast over Wall Street following the Sept. 11 attacks lifted somewhat as investors looked past a weak labor market report and a stream of earnings warnings from high-tech bellwethers like Sun Microsystems Inc..

Network computing giant Sun Microsystems gained 58 cents to $9.87, reversing early losses and ranking as the most active stock on Nasdaq. The company, one of the so-called "four horsemen'' of the Internet that helped drive the expansion of the New Economy before the tech bubble burst, warned it expects to post an operating loss wider than forecast. Sun said revenue will lag estimates and it will slash its work force by 9 percent.

Of the three other Internet horsemen, Web gear firm Cisco Systems Inc. added 52 cents to $14.94, software company Oracle Corp. gained 41 cents to $14.20 and data-storage firm EMC Corp. rose 65 cents to $13.15. 

Advanced Micro Devices Inc. fell 40 cents to $8.60. The microprocessor maker said third-quarter sales tumbled 22 percent from the second quarter, and it blamed the steeper-than-expected drop on a price war with rival Intel Corp. Intel added 41 cents to $21.96, lifting both the Nasdaq and the Dow.

The Labor Department said the U.S. unemployment rate managed to stay steady at 4.9 percent in September — but companies shed 199,000 jobs in September, almost double what Wall Street expected. 

"People are hanging their hopes on something positive here because the survey took place on the week of the attack, so most of the effect of the attack is not in these numbers,'' said Michael Farrell, portfolio manager, David L. Babson Co. 

"But I think this is quite bearish for the market,'' he added. "I think it means that the economy was declining at a more rapid pace before the attack than we had expected.'' 

The jobs numbers are expected to get much worse next month because the survey covers the pay period through Sept. 12, the day after the attacks. Since then, companies such as airlines and hotels, which are immediately affected, have announced tens of thousands of layoffs. 

In other earnings news since Thursday's close, Gateway Inc. warned of a third-quarter loss far worse than Wall Street's expectations due to falling demand after the Sept. 11 air attacks, but the No. 4 personal computer maker added it expects to return to profitability in the following quarter. Gateway shares rose 15 cents to $5.

Other companies, including gourmet coffee retailer Starbucks Corp. and software company Micromuse Inc. , stood by financial targets in announcements that also came after Thursday's close of trade. Starbucks rose $1.89 to $16.96 and Micromuse gained $1.50 to $8.93.

Midwest regional banking company U.S. Bancorp sank $3.51 to $18.44. The company said it expects its quarter profit to fall short of analysts' expectations, due mainly to a drop-off in investment banking and trading revenues.

Internet company Yahoo! Inc. shed 33 cents to $10.35. ABN AMRO cut its third-quarter revenue estimate for the company, citing the continued deterioration in the advertising climate.

Declining issues narrowly outnumbered advancers 15 to 14 on the New York Stock Exchange. Volume was 1.24 billion shares, below the 1.25 billion shares that were traded Thursday. 

The Russell 2000 index, which gauges the performance of smaller company stocks, fell 2.07 to 414.97. 

Overseas markets were mixed Friday. Japan's Nikkei stock average finished the day essentially unchanged. In Europe, France's CAC-40 lost 0.7 percent, and Germany's DAX index fell 1.4 percent. while Britain's FT-SE 100 rose 0.4 percent.

Reuters and the Associated Press contributed to this report.