Stocks Cling to Gains Friday to Close Out Winning Week

NEW YORK – Stocks clung to meager gains on Friday to close out a winning week as investors overcame dim outlooks from entertainment bellwether Walt Disney Co. and food giant Heinz.

The Dow Jones industrial average rose 20.48 points, or 0.21 percent, to end at 9,608.00, according to the latest data, posting its highest finish since the Sept. 11 air attacks on the World Trade Center and Pentagon. The Nasdaq composite edged 0.72 of a point higher at 1,828.49. The broad Standard & Poor's 500 index rose 1.77 points, or 0.16 percent, to 1,120.31.

For the week, the Dow jumped 3.05 percent, Nasdaq climbed 4.7 percent, and S&P 500 increased by 3.04 percent.

Investors bet on an economic recovery next year after the European Central Bank, the Bank of England and the U.S. Federal Reserve all delivered aggressive half-point cuts in rates this week.

Negative earnings news from household names like Walt Disney Co. dampened Friday's rally. Disney said it was suffering from weak advertising and low ratings at its ABC TV network and lower attendance at its theme parks after Sept. 11. Nevertheless, Disney reversed an early loss and climbed 11 cents to $18.95.

Heinz slumped $2.80 to $39.90 after cutting its earnings forecast, citing a slowdown in its food service business as a result of lower demand from restaurants.

Energy and oil services stocks, like Exxon Mobil, also helped underpin the market, getting a boost after Russia said it would join the Organization of Exporting Petroleum Countries, the oil cartel, in cutting production to lift sagging oil prices.

Oil stocks were higher, including Amerada Hess , which gained $2.71 to $61.86, and Conoco Inc. up $1.46 at $26.98. Exxon rose 75 cents to $40.25. The American Stock Exchange's oil index rose 2.44 percent.

Troubled energy company Enron Corp. was most active on the New York Stock Exchange for the 10th session of the past 13.

The stock initially fell after Moody's Investors Service cut Enron's short-term and long-term rating because of a steep loss of investor confidence. Then it rose 22 cents to $8.63 as news trickled out that rival Dynegy Inc. is close to taking over Enron at about $10 a share.

The market's ability to make up virtually all of the losses it made in the wake of the attacks on New York and Washington has given investors courage despite the dismal condition of corporate earnings, said Nat Paull, portfolio manager at New Amsterdam Partners.

"The current profit picture, I think everybody knows, is pretty weak, but the focus is turning to 2002, and that definitely is going to be a rebound year," Paull added.

Stocks got a fleeting boost on reports anti-Taliban forces entered the northern city of Mazar-i-Sharif in Afghanistan, marking an advance in the war against the group suspected of masterminding the Sept. 11 attacks.

"The U.S. investment psyche is badly in need of a military victory of sorts and ... so when things go a little better for our team, it is reflected in equity prices," said Robert Stovall, senior market strategist at Prudential Securities.

Aggressive rate cuts by the European Central Bank, the Bank of England and the Federal Reserve rekindled hope that lower lending rates will prompt companies to spend and expand, in turn buoying global economies and corporate earnings.

Wall Street was little moved by a report showing U.S. wholesale prices plunged at the sharpest rate on record in October as a slowing global economy sapped imported energy prices and domestic carmakers offered cut-rate financing to lure buyers into showrooms after Sept. 11 attacks.

"I don't think PPI matters in the market,'' said Arnie Owen, managing director of capital markets at money manager Cruttenden Roth. "We are looking at an economy that has been hanging on the brink since Sept 11.''

Wall Street also ignored a consumer confidence indicator that showed sentiment strengthened in early November.

Expectations and current conditions rose to 83.5 from 82.7 in October, according to the University of Michigan's index. Analysts had forecast the index to fall to 78.7.

Volume was moderate with the bond market closed early ahead of the Veterans Day holiday on Monday, traders said.

The Russell 2000 index fell 0.95 to 438.11.

Overseas, Japan's Nikkei stock average lost 2.1 percent. In Europe, Germany's DAX index dropped 1.7 percent, Britain's FT-SE 100 lost 0.6 percent, and France's CAC-40 slipped 1.3 percent.

Reuters and the Associated Press contributed to this report.