MNeagle
20th September 2010, 12:47 PM
U.S. stocks rallied to their highest level in more than four months as encouraging financial and home builder earnings boosted confidence in the economic recovery.
Adding to its three straight weeks of gains, the Dow Jones Industrial Average was on pace to close at its highest level since May 13. The Dow added 122 points, or 1.2%, to 10730 in recent trading. Already this month, the measure has climbed 7.2%, its best September performance so far since 1954.
The Standard & Poor's 500-share index gained 1.2% to 1139, breaking above 1130, the top of the index's recent trading range. The S&P 500 was also on track to climb to its highest point since mid-May.
The Nasdaq Composite rose 1.3% to 2345, buoyed by a wave of deal activity in the fast-consolidating technology industry.
"We're beginning to get some indications it's more of a muddle-through economy in the U.S., rather than a double dip," said Sean Kraus, chief investment officer at Citizens Trust. "There was so much negative news built into the markets that anything positive is good."
Stocks' gains accelerated Monday after the National Bureau of Economic Research, the unofficial arbiter of recessions' start and end dates, said the recession began in December 2007 and ended in June 2009. The report also said any future economic downturn would be a new recession, rather than the market's dreaded "double dip."
Investors also pointed to strengthening signals that Republicans would regain control of the House of Representatives in November's midterm elections as a factor in the market's brightening mood.
"Wall Street tends to love divided government," said Robert Phipps, a director at Per Stirling Capital Management. "The market is starting to price in the likelihood of a change of power in the House."
The consumer-discretionary sector climbed as investors grew more bold in hopes that the economy would avoid a double-dip, or second recession.
Lennar jumped 8.9% after the home builder reported a return to profitability in the fiscal third quarter, as its earnings beat analysts' forecast.
Among the Dow's strongest performers, Home Depot gained 2.2%. Later this week, the government will release new housing starts, building permits, existing- and new-home sales data.
Financials also rallied, boosted by credit-card companies.
Discover Financial Services gained 2.4% after reporting a fiscal third-quarter profit of $260.6 million as improving credit trends allowed the company to free up funds in reserves and cardholders spent more. Leading the Dow, American Express rose 3.6%, while J.P. Morgan Chase gained 2.1%.
International Business Machines agreed to acquire data specialist Netezza in a deal valued at $1.78 billion, as Big Blue expands its analytics business. IBM rose 1.3%, while Netezza jumped 15%.
L-1 Identity Solutions, which designs identification systems that recognize fingerprints and eye-iris patterns, rose 20% after French aerospace and defense group Safran agreed to buy the company for $1.09 billion, or $12 a share.
Helping to bolster confidence in the global economic recovery, Moody's Investors Service retained its stable outlook on the U.K., saying the country's current triple-A rating should remain safe if the fiscal consolidation plan set forward by the government in June stays on target.
Gold prices continued to rise amid speculation of further quantitative easing ahead of Tuesday's meeting of the Federal Reserve's policy-making committee. Spot gold prices climbed above $1,283 per troy ounce, before pulling back.
The dollar weakened against both the euro and the yen. Demand for Treasurys was mixed, with the two-year note flat, but the 10-year note up, pushing its yield down to 2.71%. Crude-oil prices rose above $76 a barrel.
http://online.wsj.com/article/SB10001424052748703989304575503412458109340.html?m od=WSJ_hpp_LEFTTopStories
Adding to its three straight weeks of gains, the Dow Jones Industrial Average was on pace to close at its highest level since May 13. The Dow added 122 points, or 1.2%, to 10730 in recent trading. Already this month, the measure has climbed 7.2%, its best September performance so far since 1954.
The Standard & Poor's 500-share index gained 1.2% to 1139, breaking above 1130, the top of the index's recent trading range. The S&P 500 was also on track to climb to its highest point since mid-May.
The Nasdaq Composite rose 1.3% to 2345, buoyed by a wave of deal activity in the fast-consolidating technology industry.
"We're beginning to get some indications it's more of a muddle-through economy in the U.S., rather than a double dip," said Sean Kraus, chief investment officer at Citizens Trust. "There was so much negative news built into the markets that anything positive is good."
Stocks' gains accelerated Monday after the National Bureau of Economic Research, the unofficial arbiter of recessions' start and end dates, said the recession began in December 2007 and ended in June 2009. The report also said any future economic downturn would be a new recession, rather than the market's dreaded "double dip."
Investors also pointed to strengthening signals that Republicans would regain control of the House of Representatives in November's midterm elections as a factor in the market's brightening mood.
"Wall Street tends to love divided government," said Robert Phipps, a director at Per Stirling Capital Management. "The market is starting to price in the likelihood of a change of power in the House."
The consumer-discretionary sector climbed as investors grew more bold in hopes that the economy would avoid a double-dip, or second recession.
Lennar jumped 8.9% after the home builder reported a return to profitability in the fiscal third quarter, as its earnings beat analysts' forecast.
Among the Dow's strongest performers, Home Depot gained 2.2%. Later this week, the government will release new housing starts, building permits, existing- and new-home sales data.
Financials also rallied, boosted by credit-card companies.
Discover Financial Services gained 2.4% after reporting a fiscal third-quarter profit of $260.6 million as improving credit trends allowed the company to free up funds in reserves and cardholders spent more. Leading the Dow, American Express rose 3.6%, while J.P. Morgan Chase gained 2.1%.
International Business Machines agreed to acquire data specialist Netezza in a deal valued at $1.78 billion, as Big Blue expands its analytics business. IBM rose 1.3%, while Netezza jumped 15%.
L-1 Identity Solutions, which designs identification systems that recognize fingerprints and eye-iris patterns, rose 20% after French aerospace and defense group Safran agreed to buy the company for $1.09 billion, or $12 a share.
Helping to bolster confidence in the global economic recovery, Moody's Investors Service retained its stable outlook on the U.K., saying the country's current triple-A rating should remain safe if the fiscal consolidation plan set forward by the government in June stays on target.
Gold prices continued to rise amid speculation of further quantitative easing ahead of Tuesday's meeting of the Federal Reserve's policy-making committee. Spot gold prices climbed above $1,283 per troy ounce, before pulling back.
The dollar weakened against both the euro and the yen. Demand for Treasurys was mixed, with the two-year note flat, but the 10-year note up, pushing its yield down to 2.71%. Crude-oil prices rose above $76 a barrel.
http://online.wsj.com/article/SB10001424052748703989304575503412458109340.html?m od=WSJ_hpp_LEFTTopStories