Published 12:00 am Thursday, July 25, 2002
By KERRY WHIPPLE
Following three days of major selloffs, the Dow Jones industrial average rebounded Wednesday, jumping up nearly 489 points in only the second-largest one-day point gain ever.
Investment analyst Susan Moore is optimistic the trend will continue, although she said the next two days are important.
"What we need to see is two days of follow-through," she said, "even if it’s only up 20 points or so."
The Dow closed up 488.95, or 6.4 percent, at 8,191.29. That was second only to the 499.19-point gain it had March 16, 2000.
The Nasdaq composite index was up 61.18, or nearly 5 percent, to 1,290.23. The Standard & Poor’s 500 index rose 45.73, or 5.7 percent, to 843.43.
The "emotional selling" precipitated by mistrust of big business seems to have passed for the time being, said Moore, an analyst in Alexander City.
"Market bottoms tend to mirror market tops," she said. "The greedier the top, the uglier the bottom."
Indeed, in the past few years the market had soared to historic highs – interrupted by the fears caused by Sept. 11.
Wednesday’s major rally brought the Dow up to 8,191, still far below the 10,000 milestone reached in 2000 and the 11,000 mark reached in 2001.
And if another accounting scandal happens over the next few weeks, Moore said she would not be surprised to see the market dip down again.
"That wouldn’t distress me," she said. "That would be normal."
Some traders have been waiting for an Aug. 14 deadline, set by the Securities and Exchange Commission, for major company CEOs and CFOs to sign off on their accounting practices with the SEC.
But Moore said Wednesday’s trading, also affected by a Congressional compromise bill on corporate responsibility, shows investors are coming back even before that August deadline.
"It always happens sooner rather than later," she said. "In my experience, when the market is expecting something, it starts to happen before that date."