Traders at the New York Stock Exchange. Source: AP
Wall St. Closes at 2-yr High !!!
US stocks hit fresh two-year closing highs on upbeat economic data and an optimistic tone from global bellwether FedEx.
The Dow Jones Industrial Average finished up 41.78 points, or 0.36 per cent, to 11,499.25, its highest closing level since September 8, 2008. Alcoa led the blue chips higher, adding US50 cents, or 3.6 per cent, to $US14.46. Bank of America rose US23 cents, or 1.9 per cent, to $US12.52 as it has began settlement discussions with some of its largest mortgage investors. Meanwhile, American Express was the Dow's worst performer, dropping $US1.55, or 3.4 per cent, to $US44.57.
The Standard & Poor's 500-stock index rose 7.64 points, or 0.62 per cent, to 1242.87, reaching its highest closing value since September 19, 2008. Industrial and materials stocks led the gains. All 10 of the S&P 500's sectors finished in positive territory.
The technology-oriented Nasdaq Composite gained 20.09 points, or 0.77 per cent, to 2637.31, its 10th gain in the past 12 trading sessions.
"We're seeing a continuation of dramatically higher appetite for risk in the market," said Scott Billeadeau, portfolio manager at Fifth Third Asset Management. But he's worried that investor sentiment may be getting too positive, which could hinder the recent rally.
"My guess is there will be some churning going forward as we turn to the new year," he said.
Boosting industrials, FedEx rose 1.9 per cent, after the international package shipper raised its full-year forecast and said it is more optimistic about the global economy. FedEx said it had record volume in overseas business during its fiscal second quarter, which was weighed down by a variety of labor and legal charges.
On the domestic economic front, yesterday’s US data generally painted a more optimistic picture of the economic recovery. Mid-Atlantic manufacturers saw activity surge in December. The Federal Reserve Bank of Philadelphia reported its index of general business activity registered its best monthly reading since April 2005. Still, the employment index showed hiring slowed and inflationary pressures broadened.
The report follows on the heels of Wednesday's release of the New York Fed's Empire State manufacturing index, which also showed unexpected strength.
Meanwhile, housing starts rose less vigorously than predicted, and building permits, a gauge of future construction, decreased.
But in an encouraging sign for the labour market, initial claims for unemployment benefits fell more than expected even as the previous week's figures were revised slightly upward.
Investors said the rush of data didn't dent slowly building optimism that the economy is showing signs of improvement, which in turn has been reflected in the rallying US stock market over the last few months.
"Virtually every piece of economic data [this week] has exceeded high expectations," said John Canally, an economist and investment strategist at LPL Financial. "If anything, I'm surprised the market hasn't gone higher given the high hurdle the data has overcome."
A handful of energy stocks lagged after the US Justice Department late Wednesday filed a civil oil-spill lawsuit against Transocean, which owned and operated the Deepwater Horizon oil rig, Anadarko Petroleum and oil giant BP. Transocean shares fell 4 per cent, while Anadarko sank 1.3 per cent and US-listed shares of BP edged up 0.1 per cent.
Doing little to ease concerns over European sovereign debt, Spain was again forced to pay sharply higher yields to sell long-term government bonds yesterday, one day after Moody's Investors Service warned it may downgrade Spain's credit rating.
Meanwhile, European Union leaders are gathering for a two-day summit in Brussels, where they will discuss ways to prevent and respond to future euro-zone debt crises. The European Central Bank decided to increase its subscribed capital by €5 billion to €10.76bn to help manage foreign-exchange volatility and credit risk.
Standard & Poor's Ratings Services raised China's long-term sovereign credit rating, citing the nation's improved fiscal position and growth prospects.
Source:The Wall Street Journal
No comments:
Post a Comment