Solid gains in U.S. markets ahead of holiday

Agence France-Presse, New York

U.S. stocks, which made solid gains this week, are expected to tread water during the upcoming Thanksgiving holiday period before facing uncertain times ahead, analysts said.

Boosted by good news on the Afghan war front, the Dow Jones Industrial Average rose 2.70 percent over the week to close Friday at 9,866.99 points, while the Nasdaq composite gained 3.83 percent to 1,898.58 points. The broader Standard and Poor's 500 was down 1.63 percent at 1,138.65 points.

All three are above their levels of Sept.10, the eve of the terrorist onslaught on the United States that cost some 5,000 lives and triggered the U.S.-led offensive against the Taliban and terrorist suspect Osama bin Laden.

The prospects for the markets beyond the week of the Thanksgiving holiday, which falls on Thursday, are uncertain, however.

"It's been a busy week. We've had positive news from Afghanistan and good economic numbers over the past few days," said Jefferies Co market strategist Art Hogan.

Market players will continue to monitor the military conflict in Afghanistan as well as the conflict between OPEC and non-OPEC countries over curbs in oil production, dealers said.

Consumer confidence is still weak, according to AG Edwards economist Gary Thayer, while brokerage Salomon Smith Barney expressed reservations about growth prospects for stocks, saying the markets could be affected by gloomy prospects for the overall economy as job losses continue and economic growth shrinks.

This week the market has been encouraged by the apparent collapse of the Taliban militia in Afghanistan and the release of upbeat economic indicators, notably the 7.1 percent jump in retail sales in October.

However, more discouraging were the figures for industrial output released Friday, which showed a drop of 1.1 percent in October.

The bond market was under pressure during the week as investors heartened by good news preferred stocks.

Yield, which moves inversely to price, went from 4.874 percent to 5.271 percent for 30-year bonds during the week and from 4.304 percent to 4.845 percent for the 10-year bonds.

Airline stocks closed higher on expectations that crude oil prices will help reduce costs in the ailing industry.

AMR shares gained US$1.31 to 20.06, Delta increased 0.72 to 27.97, U.S. Airways rose 1.27 to 6.97, and UAL closed 1.53 higher at 14.24.

In the oil sector, Chevron Texaco fell $0.35 to 83.45, while ExxonMobil rose 0.35 to 37.54.

In the technology sector, Dell shed $1.09 to 26.60, and Hewlett-Packard declined 0.59 to 21.50.

Xerox fell $0.51 to 6.58, following a media report that the company has moved to a new position its financial controller, who oversaw Xerox's accounts during a period currently under scrutiny by the Securities and Exchange Commission.

The copier giant's shares were also hit by this morning's announcement that it plans to sell $500 million of convertible preferred securities.

In the media sector, AOL Time Warner declined $0.65 to 36.90, as it releases its much-anticipated 'Harry Potter' movie in the United States.