Dow Gains 97 on GDP Report, G-7 Proposals

Stocks were boosted Friday by new data showing the U.S. economy is still humming, which should help corporate earnings, and steps by the world’s wealthiest nations to tackle the global turmoil.

The Dow Jones industrial average ended up 97.07 points, or 1.1%, at 8,592.10 after profit-taking cut into a big gain of nearly 175 points. For the week, it was up 139.81 points.

In the broader market, advances led declines 2,198 to 874 on volume of 785 million shares on the New York Stock Exchange. The technology-laced Nasdaq composite index rose 14.20 points, or 1%, to 1,771.39.

Bond markets sagged as fears of economic Armageddon dissipated. The yield on the benchmark 30-year Treasury bond rose to 5.15% from 5.08% on Thursday.

Before the markets opened, the government reported that the U.S. gross domestic product grew at a surprising 3.3% annual rate in the third quarter as continuing strength in consumer spending helped offset declining exports to weak markets abroad.

“I think the report that the economy is growing at a faster-than-expected rate is bullish and set aside the fears people had that recession was just around the corner,” said Alan Skrainka, chief market strategist at Edward Jones.

Meanwhile, the Group of 7 leading industrial nations--the United States, Britain, Canada, France, Germany, Italy and Japan--unveiled a package of far-reaching reforms to shore up the global financial system and end the turmoil that has rocked the world economy.

“Certainly, the G-7 was big news too, because the primary concern right now is that that the global economy would pull the U.S. economy into recession, and both the reports allay those fears,” Skrainka said.

Also helping lift the market was last-minute positioning by mutual funds, most of which closed out their fiscal years Friday. Fund managers were said to be stocking up on popular names for their annual reports to shareholders.

The dollar fell against the yen to 116.14 from 116.93 as investors, hurt by recent market volatility, continued to exit positions that bet the yen would tumble as Japan’s economy remains in recession.

Friday’s stock rally gave the Dow a gain of 139.81 points for the week and 749.38 for October, a happier conclusion to a month best known for the crashes of 1929 and 1987, as well as a 554-point plunge on Oct. 27 last year. The one-month gain of 9.6% was the biggest since the Dow rose 13.8% in January 1987. The monthly point gain was the biggest ever.

The Dow has now bounced more than 1,100 points, or about 15%, from the bottom of a steep sell-off that climaxed Oct. 8, when the blue-chip barometer was sliding back toward its summer low of 7,400.

Among Dow components, Aluminum Co. of America gained $1.75 to $79.25, International Paper jumped $2.13 to $46.44 and Minnesota Mining & Manufacturing rose $2.63 to $80.

The Standard & Poor’s composite index of 500 stocks rose 12.74 points to 1,098.67. The American Stock Exchange index was up 7.93 at 645.41. The NYSE composite index of all listed common stocks rose 7.04 points to 543.35. The average share was up 54 cents.

The Wilshire Associates equity index--the market value of NYSE, American and Nasdaq issues--was 10,032.188, up 125.317 points, or 1.3%.

The Russell 2,000 index of smaller companies rose 3.68 points to 378.16.

Overseas, Japan’s Nikkei stock average fell 0.8%. Germany’s DAX index rose 2.7%, Britain’s FTSE-100 rose 1.5% and France’s CAC-40 rose 1.1%.

Among Friday’s market highlights:

* Financial companies and brokerages were among those buoyed by the economic report. Citigroup rose $1.50, or 3.3%, to $47. American Express rose $2.41, or 2.8%, to $88.09. Donaldson, Lufkin & Jenrette jumped $5.75, or 19%, to $35.75. Lehman Bros. Holdings rose $3.44, or 9.9%, to $38. Merrill Lynch was up $2.44, or 4.3%, at $59.

* Boeing rose $1.31, or 3.6%, to $37.56, as the world’s biggest jet maker produced a record 51 planes this month, civil airplane chief Alan Mulally said, putting the company on track to meet delivery targets after repeated stumbles.

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STRONG NUMBERS

The U.S. economy displayed strength this summer despite global crises. A1

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RISK ASSESSMENT

The Group of 7 plan might entail more risk disclosure on hedge funds. C2