NEW YORK - US stocks rose as investors bought shares in some of the companies hardest hit by concern their accounting might have hid smaller profits or bigger debts. The Dow Jones Industrial Average had its biggest gain in 2 1/2 months.
General Electric, American International Group and Tyco International helped
lift the Standard & Poor's 500 Index to its first gain in four days. GE said it would provide more specific financial reports, reassuring some investors.
"On the other side of this accounting imbroglio, we should have better disclosure, and that's a good thing for stocks," said Edmund Cowart, who helps manage close to $US6 billion at Eagle Asset Management in St. Petersburg, Florida.
The S&P 500 rose 14.63, or 1.4 per cent, to 1097.97. The Nasdaq Composite Index climbed 24.99, or 1.4 per cent, to 1775.60. The Dow gained 195.96, or 2 per cent, to 9941.10.
Reports about accounting practices continued to affect some stocks. Computer Associates International fell after Newsday said it is the subject of a criminal investigation. Mortgage lenders Fannie Mae and Freddie Mac slid after a Wall Street Journal editorial said they "look like poorly run hedge funds" with "lots of leverage and snarkily hedged risk".
General Electric, the largest company by market value, gained 53c to $36.93 after the company said it would also provide more information on its finances, notably for specific businesses, through its GE Capital finance unit, the Wall Street Journal reported.
Tyco rose for a third day, climbing 75c to $28.85, after the company said its CIT Group finance unit raised $1.2 billion in a sale of securities backed by customer bills to repay maturing debt.
The advance by GE and Tyco alone accounted for more than 10 per cent of the gain in the S&P 500.
About 1.4 billion shares traded on the New York Stock Exchange, 7 per cent more than the average over the past three months. Three stocks rose for every two that fell and eight stocks advanced for every seven that declined on the Nasdaq. * In London, Britain's leading shares fell for the fourth consecutive day on Wednesday as negative outlooks from companies such as Cable & Wireless and Logica added to concerns about corporate earnings prospects.
The FTSE 100 fell to its lowest level for more than three months as banking, telecoms and technology stocks were hit by the cautious outlooks. Worries about accounting problems also refuse to go away.
It closed down 68.4 points, or 1.3 per cent, at 5024.10. The index has lost 3.5 per cent in the last four days.
"The newsflow hasn't been dreadful, but there is a lack of confidence coming from companies at the moment," said Hilary Cook, director of investment strategy at Barclays Stockbrokers.
"Until we get more visibility from companies it's difficult to be that confident."
Telecoms stocks knocked eight points off the FTSE 100's value, as concern about growth prospects were exacerbated when Cable & Wireless cut its full-year sales and margin forecasts. C&W shares dropped 7.2 per cent.
- AGENCIES
NEW YORK - US stocks rose as investors bought shares in some of the companies hardest hit by concern their accounting might have hid smaller profits or bigger debts. The Dow Jones Industrial Average had its biggest gain in 2 1/2 months.
General Electric, American International Group and Tyco International helped
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