Hopes for Rebound Continue to Spur Market

Stocks rallied for the second straight session Monday as expectations for an economic rebound overshadowed fears of shady accounting practices.

“The market has finally begun to look beyond the Enron cloud and respond to what we believe are very positive fundamentals,” said Milton Ezrati, a senior economic strategist at Lord Abbett & Co.

Industrial stocks such as DuPont, Caterpillar and Nucor climbed as investors positioned themselves for an anticipated recovery in the U.S. economy this year.

Wireless technology company Qualcomm and conglomerate Tyco International bounced back after being pounded by accounting concerns.

Stocks gathered momentum throughout the session. The Dow Jones industrial average jumped 140.54 points, or 1.4%, to 9,884.78, adding to Friday’s 119-point gain. The Nasdaq composite index climbed 27.78 points, or 1.5%, to 1,846.66. The Standard & Poor’s 500 index rose 15.72 points, or 1.4%, to 1,111.94.

Winners led losers by 2 to 1 on the New York Stock Exchange and by 4 to 3 on Nasdaq. Trading was moderate.

Stocks snapped a five-session losing streak Friday, putting an end to the longest string of losses in the market since September. Investors are still on edge after the bankruptcy of Enron, but panic over the prospect of another accounting scandal is subsiding, analysts said.

Qualcomm rose $3.82 to $41.28 after defending its books Friday after a research firm’s report that raised concerns about the wireless technology firm’s accounting.

Tyco rose $1.92 to $31.80 and was again the most active NYSE stock. The conglomerate has rallied in the last four sessions after taking a beating when investors questioned its accounting.

“People are getting more comfortable with the whole accounting issue.... Companies are coming out pretty quickly when they are attacked,” said Owen Fitzpatrick, head of the U.S. Equity Group at Deutsche Bank Private Banking.

DuPont climbed $1.84 to $44.56, boosting the Dow. The largest U.S. chemical company said it could spin off its $6.5-billion textiles and interiors businesses as part of a broad restructuring.

Semiconductor stocks buoyed the Nasdaq. Credit Suisse First Boston raised its rating on Micrel, which rose $1.95 to $21.74, and National Semiconductor, which gained 87 cents to $27.15, on expectations the sector has reached bottom. Intel, the biggest chip maker, climbed $1.05 to $33.57. The Philadelphia Stock Exchange’s semiconductor index rose 3.8%.

Treasury bond yields inched up as waning accounting concerns prompted some investors to sell government securities to buy stocks. Also, bonds of companies such as Bank of America and General Electric Capital rallied, luring money away from government debt. The yield on the benchmark 10-year Treasury note rose to 4.91% from 4.88% Friday.

In other market news:

* Oil stocks added fuel to the market after crude prices jumped $1.15 a barrel to $21.41 in New York trading on concerns that a U.S. government decision to buy more than 18 million barrels of crude for its stockpiles would create a supply shortage in March.

Exxon Mobil rose 21 cents to $38.50 and ChevronTexaco climbed $1.10 to $82.95. Offshore oil and gas driller Noble Drilling gained $1.09 to $31.78. Oil-field services giant Schlumberger added $1.97 to $55.86.

* Handspring gained 34%, rising $1.49 to $5.90, on optimism the company’s new Treo hand-held device will help it turn a profit.

Gold-related shares, which have rallied along with gold prices, took a hit after Prudential Financial slashed its rating on Newmont Mining to “sell” from “hold.” Newmont slumped $1.49 to $23.51. Gold futures fell $3.40 an ounce to $300.10 in New York trading.

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Market Roundup, C9-10