Dow Rockets 114.60 on Hopes of Quick Victory

NEW YORK —  The stock market soared in heavy trading today, responding euphorically to early signs of success in the military campaign against Iraq.

The Dow Jones average of 30 industrials closed up 114.60 points at 2,623.51, a gain of 4.47% and its biggest rise since just after the 1987 market crash and its second-largest gain in history. Volume was a hefty 318.89 million shares.

The broader market was also robust, with leading issues on the New York Stock Exchange outnumbering losers by about 7 to 1. Volume was a very heavy 266 million shares.

News accounts of what had been happening in the attack sent bond prices soaring and interest rates tumbling in the credit markets. At the same time, oil prices plunged.

Amid all the excitement, many analysts cautioned that the markets were operating on a shot of adrenaline that might dissipate quickly.

“It’s a great time to get whipsawed right now,” said Robert Stovall at Stovall-Twenty-First Advisers Inc. “When we sober up from this euphoria, we’ll count up the costs and look again at the recession in our own economy.”

Stock markets around the world rallied sharply through the night as investors watched the progress of air strikes in Operation Desert Storm.

In Germany, the key market index catapulted 7.5% to register its largest single-day advance in history, while stocks in Tokyo put in their 10th best performance ever.

“All around the globe it’s the same euphoric feeling right now,” said Robert Rollan, head of international equities trading at Shearson Lehman Brothers Inc. in New York.

News that the allied forces had launched a massive air attack on targets in Iraq and Kuwait initially unsteadied the Tokyo market, sending prices lower. But stocks quickly recovered and rocketed higher, with the key Nikkei average of 225 selected issues gaining 1,004.11 points, or 4.47%, to close at 23,446.81.

That upward spiral set the tone for markets elsewhere, lifting stock prices throughout Asia and Europe as well as on smaller exchanges extending from Santiago to Manila.

The advance in London stocks trailed other markets, but the Financial Times-Stock Exchange 100-share index still managed to post a 2.4% gain on a 49.8 point rise to 2,104.6. Traders there appeared more cautious and warned of the dangers of over-optimism.