Industrials, financials pull stock market higher
Gains in industrial and financial stocks pull market to 4th straight advance;
Dow adds 50
* By Tim Paradis, AP Business Writer
* On Wednesday September 9, 2009, 4:38 pm EDT
* Buzz up! 0
* Print
* Companies:
* Boeing Co.
* Caterpillar Inc.
* General Electric Co.
NEW YORK (AP) -- The stock market extended its gains to a fourth day as the
Federal Reserve said the economy was stabilizing.
Related Quotes
Symbol
Price
Change
BA50.53 +1.03
CAT48.41 +1.44
GE14.87 +0.37
TXT18.41 +0.43 {"s" : "ba,cat,ge,txt","k" : "c10,l10,p20,t10","o" : "","j" :
""}
Industrial
and financial stocks led the advance Wednesday, which lifted the Dow
Jones industrial average 50 points by the closing bell, having been up
80 points earlier.
Stocks briefly surrendered their gains
following the release of the Fed's report on regional economies, which
also found that consumer spending would rise but only because of car
purchases linked to the government's brief Cash for Clunkers program.
The
prolonged slump in consumer spending has been one of the most serious
points of worry for economists, and the Fed's warning about it deflated
some of the market's optimism. About 70 percent of the U.S. economy
depends on spending by consumers.
Matt Lloyd, chief investment
strategist at Advisors Asset Management, said investors were jittery
following the Fed's report because many traders are fearful of a
correction following a 50 percent surge in the market over the past six
months.
"To me there is no conviction" behind the market's recent gains, Lloyd said.
According
to preliminary calculations, the Dow rose 49.88, or 0.5 percent, to
9,547.22. The index has added 267 points, or 2.9 percent, in four days.
The
broader Standard & Poor's 500 index gained 7.98, or 0.8 percent, to
1,033.37, while the Nasdaq composite rose 22.62, or 1.1 percent, to
2,060.39.
The Russell 2000 index of smaller companies rose 10.02, or 1.7 percent, to
586.40.
Advancing
stocks outpaced those that fell by about 5-to-2 on the New York Stock
Exchange, where volume came to 1.2 billion shares compared with 1.3
billion Tuesday.
Jeff Kleintop, chief market strategist at LPL
Financial Services, said a break in the rally could be good for the
market to keep stocks from racing too high, too quickly.
"I think we're maybe due for a little bit of consolidation," he said.
Kleintop
also contends that economic readings are becoming a less powerful force
on the market as more investors begin to expect an improvement in the
economy.
"Economic data has lost a lot of its power to really move the market around.
The consensus has now become we're in a recovery."
Light,
sweet crude rose 20 cents to settle at $71.31 per barrel on the New
York Mercantile Exchange. Gold fell but still hovered near $1,000 after
crossing that mark Tuesday for the first time since February.
Industrial
shares were the biggest gainers, as investors bet that higher commodity
prices will translate to increased profits if the economy strengthens.
The weaker dollar also makes the goods of U.S. exporters cheaper
outside the U.S.
Caterpillar Inc. was among the strongest
advancers of the 30 stocks that make up the Dow industrials. Shares of
the maker of construction and mining equipment rose $1.44, or 3.1
percent, to $48.41.
Airplane maker Boeing Co. rose $1..03, or 2.1
percent, to $50.53, while General Electric Co. rose 37 cents, or 2.6
percent, to $14.87.
Aircraft maker Textron Inc. rose 43 cents, or
2.4 percent, to $18.41 after the company said it would leave its 2009
profit forecast unchanged.
Bond prices mostly rose. The yield on the benchmark 10-year Treasury note was
flat at 3.48 percent from late Tuesday.
Haag
Sherman, chief investment officer at Salient Partners in Houston, said
investors' demand for stronger returns is weighing on the dollar,
though he notes that the 10-year Treasury note has held its ground as
some investors remain skeptical about a rebound in the economy.
"The 10-year really hasn't been punished as much lately. I think there is a
tug-of-war between the equity and the bond market."
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