Stocks on Wall Street rose last night after President Bush proposed at least $60 billion in new tax cuts to help cushion the US economy from the fallout of last month's air attacks.
"Investors are looking for action by Washington and they're looking for quick action," said Mr Peter Coolidge, managing director of equity trading at Brean Murray & Co. "Today's comments reinforce the hope of the market that we will get a quick, significant stimulus package that will give the economy a needed shot in the arm."
Stocks had floundered deep in negative territory after companies like high-tech bellwether Sun Microsystems warned of dismal results and the government said monthly job losses hit their highest level in a decade. But President Bush's call for a tax-relief package late in the day helped dispel the gloom hanging over Wall Street.
Stocks tumbled to three-year lows following the US attacks, but have been crawling back in the past two weeks. Investors this week welcomed solid outlooks from tech icons Dell Computer and Cisco Systems as well as the Federal Reserve's ninth interest-rate cut this year. The tech-packed Nasdaq scored its fourth straight winning session on Friday and racked up its biggest weekly rise since April.
"Investors for the most part are willing to write off the third quarter and look more toward the fourth quarter and first quarter," said Mr Jeff Kleintop, chief investment strategist of PNC Advisors, which manages about $60 billion. "Given the fiscal and monetary policy, investors are hoping the economic rebound will be sharp and will result in some earnings acceleration."
The Nasdaq rose 7.99 points, or 0.50 percent, to 1,605.30, after losing roughly 3 percent earlier. The blue-chip Dow Jones industrial average gained 58.89 points, or 0.65 percent, to 9,119.77, after falling more than 1 percent earlier. The broader Standard & Poor's 500 Index nosed up 1.75 points, or 0.16 percent, to 1,071.38.