Dow Tops 7,000 As Rally Continues

The Dow Jones industrial average pushed back above 7,000 on Wednesday as investors, emboldened by Tuesday’s pleasing indications on inflation, shrugged off a more worrisome economic report.

Broader stock measures enjoyed the day’s biggest gains as bargain hunters sought out technology shares and other sectors that have lagged the Dow’s rebound from the market’s recent slide.

The Dow, which surged 179 points higher on Tuesday, rose 46.96 to 7,008.99, the blue-chip barometer’s first finish above 7,000 since it began a 700-point slide on March 12. In the morning, the Dow moved within 20 points of record territory, swinging from a 26-point loss to a 95-point gain.

Although soothing to many investors who’d seen the entire year’s gains evaporate in less than a month, many analysts found the two-day rally unnerving.

“It’s a perfect case of denial,” said John Lynch, director of investment strategy at Interstate/Johnson Lane in Charlotte, N.C. He called it unrealistic to presume that the inflation and interest rate concerns that so recently sent the markets tumbling have suddenly abated. “Yesterday’s and today’s reaction is based more on euphoria than fundamentals.”

Advancing issues outnumbered decliners by a 5-to-3 margin on the New York Stock Exchange, where volume totaled 556.04 million shares as of 4 p.m., almost even with Tuesday’s hectic pace.

Some of the stocks that moved substantially or traded heavily Wednesday: NYSE

Boeing, up 2-3/8 at 98-5/8.

Russia’s Aeroflot air carrier signed a $400 million contract to buy 10 Boeing jetliners. On Tuesday, Boeing announced a $100 million investment in Teledesic, which plans to spend $9 billion to put 288 satellites in orbit to allow wireless access to the Internet and other telecommunications services.

Boston Scientific, up 5-3/4 at 48-1/4.

The Natick, Mass.-based maker of medical devices said its first-quarter net earnings were 40 cents per share, compared with a loss of 1 cent last year.

Imation, down 1-1/4 at 23-5/8.

The imaging and information products concern reported a first-quarter profit that doubled year-ago levels, but warned that the recent strengthening of the dollar will hurt revenue growth this year.

NASDAQ

Ascend Communications, up 4-5/16 at 45-3/4.

Apex Global Information Services chose to use Ascend’s “GRF 400” high performance IP switches as part of a major upgrade of its network infrastructure.