Stocks rose for the third straight day Tuesday, the longest uptrend in a month, as buyers nibbled at shares despite mounting security concerns ahead of the Sept. 11 commemoration.
The blue-chip Dow Jones industrial average rose 83.23 points, or 0.98 percent, at 8,602.61, according to the latest available data. The broad Standard & Poor's 500 added 6.62 points, or 0.73 percent, to 909.58. The tech-packed Nasdaq Composite Index gained 15.49 points, or 1.19 percent, to 1,320.09.
"There are tremendous 'what if' questions regarding Sept. 11, but the market is beginning to throw off some of its other worries," said Milton Ezrati, senior economist at Lord Abbett & Co., which oversees $45 billion. "We haven't had a corporate scandal in a while. If nothing happens on Sept. 11 and the U.S. shows some diplomatic savvy with Iraq, we think a rally is likely in the next months."
A modest rally lost steam in the early afternoon after Attorney General John Ashcroft the United States has identified a high risk of a terrorist attack on Wednesday's anniversary of the attacks that killed nearly 3,000 people a year ago. But stocks then regained lost ground and finished near session highs.
The three days of gains marked the longest such streak in a month.
"All this talk of high risk adds to the 9/11 concerns, but if we get through that with no incident, maybe we get a relief rally Thursday," said Joe Seminara, head of trading at Dreyfus Corp. "Volume is thin, it's trading like the day after Thanksgiving. The anniversary of 9/11 is keeping a shroud."
Semiconductor shares like Intel Corp. (INTC) and graphics chip maker Nvidia Corp. (NVDA) helped prop up the market. But biotech firm Genentech Inc. ranked as a big loser with a 9 percent drop after it reported disappointing trial results in the treatment of breast cancer patients.
Major U.S. stock markets will delay the open of trading until about 11 a.m. on Wednesday to mark the anniversary, with markets and exchanges around the country following suit. Financial professionals will attend ceremonies for the thousands who died in the hijacked airliner attacks that toppled lower Manhattan's World Trade Center towers.
The stock market had staged a big turnaround on Monday and finished higher as investors worked past jitters over Sept. 11 and fears of a possible U.S. attack on Iraq. The gains added to a hefty rally last Friday.
But worries persist over another Sept. 11 attack. The U.S. Navy of possible attacks on oil tankers in the Middle East Gulf by al Qaeda, the group the United States blames for last year's attacks.
"This is a bit of a bounce-back rally out of the correction," said Charles White, president of Avatar Associates, which oversees $2 billion. "From a psychological perspective, though, it's good that we are able to do this in front of tomorrow's remembrance, but there are still hurdles ahead."
Shares in United Technologies Corp. (UTX), a diversified manufacturer, rose after it said its full-year 2002 profit would be in line with estimates. Shares of the Dow component moved up $2.08 to $61.21, or 3.5 percent.
But a profit warning from Jack in the Box Inc. (JBX) slammed the shares of the fast food restaurant operator with a 9 percent loss and weighed on other issues in the sector. Wendy's International lost 54 cents to $34.10 and McDonald's Corp. (MCD), a Dow stock, lost 15 cents at $21.30. Jack in the Box shares fell $2.55 at $24.65.
Investors got some good news from second-tier economic data. Two reports showed shopping malls got a little busier during the first week of September, giving retailers hope a summer sales lull was behind them. Consumer spending accounts for two-thirds of the U.S. economy.
Sales at U.S. chain stores rose 0.6 percent in the first week of September compared with the same period last month, Instinet Research's Redbook report said. A separate measure of chain store performance, published jointly by the Bank of Tokyo-Mitsubishi and UBS Warburg, showed a milder 0.1 percent sales gain following a 0.5 percent increase a week earlier.
Semiconductor shares helped boost the market. Intel (INTC) rose 39 cents to $16.47. Chip equipment maker KLA-Tencor Corp. (KLAC) jumped $1.46 to $33.55. The Philadelphia Stock Exchange Semiconductor index rallied 3.6 percent.
Nvidia (NVDA) jumped $1.32, or more than 14 percent, to $10.57 after main competitor ATI Technologies Inc. warned that its results would be below forecasts because of lagging sales of chips for laptop computers.
Shares in ATI Technologies (ATYT) rose 41 cents, or 7.2 percent, to $6.06 on the Nasdaq in what traders called a relief rally. They said ATI Technologies' dour news was not a surprise given the malaise in the computer industry.
Genentech (DNA) tumbled $3.11 to $28.89. The company reported disappointing results of a pivotal-stage trial of its experimental drug Avastin, in combination with another drug, in treating relapsed metastatic breast cancer patients.
Automaker Ford Motor Co.(F) rose 10 cents to $10.90. The company, nine months into a multiyear turnaround plan after its $5.45 billion loss last year, said it will make a small profit in the third quarter and not the loss it forecast earlier.
Nokia Corp (NOK), the world's No. 1 cellphone maker, fell 31 cents to $13.87. The Finnish company cut its sales target for the third quarter amid weak demand for mobile network equipment, but kept its profit outlook as it benefited from cost cuts and the launch of color-screen phones.
Shares in New York Times Co. (NYT) moved up 1.9 percent after it said it was on track to meet its third-quarter and full-year earnings expectations, citing improving trends in advertising. Shares rose 91 cents to $47.81.
Volumes were thin on Tuesday with about 1.1 billion shares traded on the New York Stock Exchange and 1.4 billion on the Nasdaq.
The Russell 2000 index, which tracks smaller company stocks, rose 1.69, or 0.4 percent, to 394.16.
Overseas, Japan's Nikkei stock average finished Tuesday essentially flat, inching up just 0.03 percent. In Europe, France's CAC-40 rose 3.1 percent, Britain's FTSE 100 gained 2.8 percent, and Germany's DAX index advanced 1.9 percent.
Reuters and the Associated Press contributed to this report.