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Spokane, Washington  Est. May 19, 1883

Dow Leaps 179 Points, Approaches 7,000 Level

Associated Press

The stock market soared back toward record levels Tuesday, with the Dow Jones industrial average nearly scoring its biggest point gain ever, as investors celebrated a tame inflation reading on a key inflationary force.

The Dow rose 179.01 to 6,962.03, moving within striking distance of 7,000 for the first time since the start of a nearly 700-point retreat from its March 11 high of 7,085.16.

And in stark contrast with other, seemingly half-hearted efforts to rebound from its recent slide, the broad market kept pace with the blue-chip sector this time.

“It’s a very high-quality rally today. I’m impressed,” said A. Marshall Acuff Jr., a market strategist at Smith Barney, noting that four issues rose for every one that fell on the New York Stock Exchange. “We have great breadth. No one can complain about that today.”

Stocks were catapulted at the open by the bond market, where interest rates plunged below a psychologically important barrier after the Labor Department reported that Americans’ wages and benefits rose a modest 0.6 percent in the first quarter. Investors also were cheered by two separate reports suggesting that other inflationary pressures may be easing.

Volume on the NYSE totaled 547.66 million shares as of 4 p.m., up sharply from Monday’s pace.

Some of the stocks that moved substantially or traded heavily Tuesday:

NYSE

IBM, up 8 at 158-3/8.

The computer maker raised its dividend by 14 percent to 40 cents a share and announced plans to buy back up to $3.5 billion worth of its stock.

PepsiCo, up 3-1/8 at 34-3/8.

The company’s earnings rose an unexpectedly strong 8 percent in the first quarter. PepsiCo also said it was moving ahead with plans to spin off its major fast-food chains - Pizza Hut, Taco Bell and KFC into a separate company and to sell several smaller restaurant businesses.

Nokia, up 3-7/8 at 61-5/8.

The Finnish telecommunications group shook off last year’s sluggish growth and operating losses, more than tripling its pretax profit in the first quarter of this year. The improvement was due mainly to strong growth in its mobile phone business.

NASDAQ

CoreStaff, down 4-1/2 at 18-3/4.

The Houston-based provider of information technology and staffing services reported better-than-expected profits for the first quarter. However, Alex. Brown & Sons lowered its rating on CoreStaff, the Dow Jones News Service reported.

Diamond Home Services, down 5-3/4 at 8-5/8.

The provider of home improvement products and services reported disappointing results for the first quarter. Diamond Home is based in Woodstock, Ill.