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Dow's 1-week rally best since '82
By Jim Fuquay
Star-Telegram Staff Writer
Fort Worth Star-Telegram, March 22, 2003
The Dow Jones industrial average finished its biggest one-week rally since 1982 with a 235-point gain Friday, driven by favorable war news out of Iraq.
For the week, Wall Street's most-watched stock index closed at 8,521.97, up 662 points, or 8.4 percent. The Dow has risen eight straight trading days, its longest streak since December 1998, rising 997 points, or 13.3 percent.
Shares in AMR Corp. and other airlines were among the biggest gainers, partly on hopes of lower fuel costs. AMR was up 63 cents a share, or 36 percent, Friday and up 43 percent for the week.
Southwest Airlines of Dallas gained 14 percent for the week, including a 7 percent gain Friday. Delta Air Lines was up 40 percent for the week, and Continental Airlines was up 36 percent.
Fort Worth-based AmeriCredit was another big gainer this week, as it secured additional financing to fund its auto loan business, which has suffered sharp setbacks in the past year that have driven down the company's stock price more than 90 percent. A stronger economy would also help its struggling borrowers. AmeriCredit's shares rose 27.5 percent during the week.
Among other major Tarrant County employers, General Motors shares rose 10.2 percent during the week. Burlington Northern Santa Fe was up 9.6 percent, Nokia was up 10.5 percent, RadioShack was up 8.3 percent and Pier 1 Imports was up 7.9 percent.
"Investors are relieved by the progress of the conflict in Iraq, which is better than many people believed," said Robert Streed, portfolio manager of Northern Trust Select Equity Fund in Chicago.
"There might be another issue going on as well -- the Dow and S&P have now moved into positive territory for the year and we're approaching the end of the quarter," he said. "So some portfolio managers who are not invested might feel a need to get money in the market."
Investors shrugged off a disappointing government report on a major inflation gauge. The Labor Department reported that the Consumer Price Index increased by 0.6 percent in February, the largest rise in two years. That was twice as fast as January's 0.3 percent advance.
Long-term interest rates have risen sharply as investors, who have been avoiding the 3-year-old bear market in stocks in favor of bonds, have started moving money back into stocks. The benchmark 30-year U.S. Treasury bond's yield rose to 5.02 percent Friday, up from its low of 4.60 on March 12.
Mortgages have risen about a half-percentage point in that time, said Judith Smith of Judith O. Smith Mortgage Group in Fort Worth. But with rates still around 6 percent, "it's hard to complain," she said.
David Motley, executive vice president of Colonial Mortgage in Fort Worth, said "the stock market participants see the war as a short-lived phenomenon, which bids up stock prices and takes money away from bonds." He considers the jury to be still out on whether the stock market will maintain its rebound.
According to a Bankrate.com survey, 30-year fixed-rate mortgages rose during the week to an average 5.92 percent.
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