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Stocks end mostly higher as industrials gain
Source: Agencies |
January 12, 2010, Tuesday
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HOPES that global manufacturing activity is heating up lifted industrial stocks yesterday ahead of an earnings report from Alcoa Inc.
The Dow Jones industrial average rose 46 points, while the broader Standard & Poor's 500 index rose for a sixth straight day. The Nasdaq composite index slipped.
After the closing bell Alcoa, the nation's largest aluminum producer, posted revenue that topped expectations, but profits fell short of forecasts, excluding charges. The report gave the market one of its first looks at how companies fared in the final quarter of 2009.
The Alcoa numbers followed a report that China's exports jumped 18 percent. The bigger-than-expected increase follows 13 straight months of declines and raised hopes that the world economy is strengthening.
"The global economy is healing," said Roy Williams, CEO of Prestige Wealth Management Group in Flemington, New Jersey. However Williams cautioned that the recovery will still face "a lot of potholes." On Friday, for example, the Labor Department reported a larger-than-expected number of job losses for December.
Some parts of the market that rose yesterday, however, signaled that investors remain concerned about the economy. Areas like utilities and consumer staples rose, which are seen as safer during tough economies because they produce necessities.
Earnings reports begin arriving in greater numbers next week and will shape traders' assessment of the economy.
Keefe, Bruyette & Woods Inc. equity strategist Fredrick Cannon said investors will be looking at the earnings reports for confirmation that improvements in economic indicators aren't just signaling a restocking of depleted inventories but instead show businesses are drawing customers.
"What we're looking for is signs of how strong the economy really is," Cannon said.
The Dow Jones industrial average rose 45.80, or 0.4 percent, to 10,663.99. The Standard & Poor's 500 index rose 2.00, or 0.2 percent, to 1,146.98, while the Nasdaq composite index fell 4.76, or 0.2 percent, to 2,312.41.
The S&P 500 index has risen each day in the new year. The only other time the index has risen the first six trading days of the year was in 1987, when it advanced for seven straight days. The 2.9 percent gain so far in 2010 is a sharp contrast to the slide of 1.4 percent the index logged in the early days of last year.
Crude oil fell 23 cents to settle at US$82.52 per barrel, while gold and copper rose.
Caterpillar Inc., the world's largest maker of construction and mining equipment, rose US$3.79, or 6.3 percent, to US$64.13 after the report on China's exports and as some commodity prices gained.
The latest sign of a revival in corporate dealmaking provided another positive indicator for the economy. Heineken NV said it will buy the beer-making operations of Mexico's Femsa in an all-stock deal that values Femsa at US$5.5 billion. Femsa makes Dos Equis, Tecate and Sol beers.
Traders are looking to build on a strong first week to the new year. The Dow advanced 1.8 percent, the S&P 500 index jumped 2.7 percent and the Nasdaq added 2.1 percent last week.
Wall Street's rise during the first week of the year is a promising sign for things to come. The S&P 500 has posted full-year gains 31 of the last 36 times the index rose during the first week of the year, according to the Stock Trader's Almanac.
Bond prices rose, sending the yield on the 10-year Treasury note down to 3.82 percent from 3.84 percent late Friday.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to a light 967.1 million shares, compared with 994.2 million Friday.
The Russell 2000 index of smaller companies fell 0.57, or 0.1 percent, to 643.99.
The Dow Jones industrial average rose 46 points, while the broader Standard & Poor's 500 index rose for a sixth straight day. The Nasdaq composite index slipped.
After the closing bell Alcoa, the nation's largest aluminum producer, posted revenue that topped expectations, but profits fell short of forecasts, excluding charges. The report gave the market one of its first looks at how companies fared in the final quarter of 2009.
The Alcoa numbers followed a report that China's exports jumped 18 percent. The bigger-than-expected increase follows 13 straight months of declines and raised hopes that the world economy is strengthening.
"The global economy is healing," said Roy Williams, CEO of Prestige Wealth Management Group in Flemington, New Jersey. However Williams cautioned that the recovery will still face "a lot of potholes." On Friday, for example, the Labor Department reported a larger-than-expected number of job losses for December.
Some parts of the market that rose yesterday, however, signaled that investors remain concerned about the economy. Areas like utilities and consumer staples rose, which are seen as safer during tough economies because they produce necessities.
Earnings reports begin arriving in greater numbers next week and will shape traders' assessment of the economy.
Keefe, Bruyette & Woods Inc. equity strategist Fredrick Cannon said investors will be looking at the earnings reports for confirmation that improvements in economic indicators aren't just signaling a restocking of depleted inventories but instead show businesses are drawing customers.
"What we're looking for is signs of how strong the economy really is," Cannon said.
The Dow Jones industrial average rose 45.80, or 0.4 percent, to 10,663.99. The Standard & Poor's 500 index rose 2.00, or 0.2 percent, to 1,146.98, while the Nasdaq composite index fell 4.76, or 0.2 percent, to 2,312.41.
The S&P 500 index has risen each day in the new year. The only other time the index has risen the first six trading days of the year was in 1987, when it advanced for seven straight days. The 2.9 percent gain so far in 2010 is a sharp contrast to the slide of 1.4 percent the index logged in the early days of last year.
Crude oil fell 23 cents to settle at US$82.52 per barrel, while gold and copper rose.
Caterpillar Inc., the world's largest maker of construction and mining equipment, rose US$3.79, or 6.3 percent, to US$64.13 after the report on China's exports and as some commodity prices gained.
The latest sign of a revival in corporate dealmaking provided another positive indicator for the economy. Heineken NV said it will buy the beer-making operations of Mexico's Femsa in an all-stock deal that values Femsa at US$5.5 billion. Femsa makes Dos Equis, Tecate and Sol beers.
Traders are looking to build on a strong first week to the new year. The Dow advanced 1.8 percent, the S&P 500 index jumped 2.7 percent and the Nasdaq added 2.1 percent last week.
Wall Street's rise during the first week of the year is a promising sign for things to come. The S&P 500 has posted full-year gains 31 of the last 36 times the index rose during the first week of the year, according to the Stock Trader's Almanac.
Bond prices rose, sending the yield on the 10-year Treasury note down to 3.82 percent from 3.84 percent late Friday.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to a light 967.1 million shares, compared with 994.2 million Friday.
The Russell 2000 index of smaller companies fell 0.57, or 0.1 percent, to 643.99.
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