Market Leaps Almost 150 Points Experts Say Clinton’S Testimony Takes Scare Out Of Market

The Dow industrials rose nearly 150 points Monday as President Clinton began answering questions about Monica Lewinsky, potentially removing one of the many uncertainties dogging the stock market.

The Dow Jones industrial average reversed an early 56-point slide and rose 149.85 to 8,574.85, with the rally accelerating in the early afternoon as the president began his grand jury testimony from the White House.

Despite the rally, the Dow remains 763 points, or 8.2 percent, below the July 17 record of 9,337.97.

While that monthlong slide has been fueled by fears that Asia’s fiscal crisis and a domestic slowdown will hinder growth in corporate profits, the Lewinsky drama has spooked foreign investors, a key source of demand for U.S. stocks.

Prior to Monday’s testimony, presidential advisers said Clinton had been prepared by his lawyers to acknowledge an “inappropriate relationship” with the former White House intern and answer questions about whether it was sexual and whether he sought to conceal it.

“The psychology of the market today is that a lot of the bad news is out,” said Michael Metz, a market analyst at CIBC Oppenheimer. “Regardless of what happens with Clinton’s testimony, the situation is about to reach a climax. My sense is that there’s no new negative news to the testimony, so it’s an anticlimax.”

Meanwhile, in another boost for the market, U.S. Federal Reserve policymakers probably will leave interest rates unchanged today, as they have for almost 17 months, amid little sign of accelerating inflation.

Since policymakers last met on July 1, economic growth has cooled, inflation has stayed benign and the Standard & Poor’s 500 Index has fallen 6.5 percent.

In addition, the dampening effects of economic crises in Asia and Russia may intensify.

Monday’s advance came despite another day of unsettling developments overseas.

The Nikkei stock average fell 2.2 percent amid growing doubt about the new prime minister’s ability to resuscitate Japan’s economy.

In the world’s other financial hot spot, the Russian central bank devalued the ruble, a move expected to cause more hardship for Russian consumers by raising the price of key imports including groceries.

Moscow also said it would halt payment on government treasury bills and impose a 90-day moratorium on payments of foreign debt.