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Stronger manufacturing report lifts stock market
Source: Agencies |
February 19, 2010, Friday
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Online Edition
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AN increase in regional manufacturing pushed the stock market to its third straight advance and offset concerns about lower sales at Wal-Mart.
The Dow Jones industrial average rose 84 points, bringing its gains for the week to nearly 300 points.
Treasury prices fell as improvements in some economic reports eased demand for safe havens.
The Philadelphia Federal Reserve said its index of regional manufacturing rose to 17.6 in February from 15.2 in January. That follows reports the past two days that also pointed to a pickup in business at the nation's factories.
The report lifted stocks of companies that process raw materials because increased manufacturing should boost sales. Newmont Mining Corp. and glass maker Owens-Illinois Inc. each rose more than 2 percent.
The market drifted higher in light trading volume so analysts cautioned against reading too much in to the latest gain. Light volume indicates that many investors with concerns about the market are staying on the sidelines.
The market's gains were modest in the early hours of trading after Wal-Mart Stores Inc.'s reported a drop in quarterly sales at its flagship US stores and issued a disappointing forecast.
At the same time, the Labor Department reported that the number of workers seeking unemployment benefits for the first time rose 31,000 to 473,000 last week. Economists polled by Thomson Reuters forecast claims would fall. Unemployment is a major obstacle to a sustained recovery.
Investors have been buying stocks this week on growing evidence of improvement in the US economy. They have stopped worrying, at least for now, about potential overseas troubles derailing a global recovery. Investors have been concerned that debt problems in Greece and other European countries could spread. China's move to tighten lending standards and slow its growth to avoid speculative bubbles has also worried investors.
Eric Mintz, assistant portfolio manager of the Eagle Mid Cap Growth Fund in St. Petersburg, Fla., said traders were able to look past the latest jobs report because heavy snow in parts of the country has skewed some of the numbers to make unemployment look worse. He said the bulk of economic reports still signal the economy is improving.
"We're in the early phases of the recovery and you are going to get spotty data," he said.
The Dow rose 83.66, or 0.8 percent, to 10,392.90, putting its gain for the week at 294 points. The broader Standard & Poor's 500 index rose 7.24, or 0.7 percent, to 1,106.75, and the Nasdaq composite index rose 15.42, or 0.7 percent, to 2,241.71.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.80 percent from 3.74 percent compared late Wednesday.
The dollar mostly rose against other major currencies.
Earnings reports were mixed. Wal-Mart reported a fourth-quarter profit that topped analysts' expectations. But sales at stores open at least a year fell. The company predicted sales at stores open a year will be down as much as 1 percent or up as much as 1 percent for its US namesake stores this year. The stock fell 59 cents, or 1.1 percent, to US$53.47.
Hewlett-Packard Co. reported a better-than-expected fiscal first quarter after the market closed Wednesday. The computer and technology company, which like Wal-Mart is a component of the Dow, also forecast full-year revenue and profit that exceeds analysts' expectations. Its shares rose 69 cents, or 1.4 percent, to US$50.81.
Newmont Mining rose US$1.17, or 2.5 percent, to US$48.41, while Owens-Illinois rose 66 cents, or 2.4 percent, to US$27.81.
More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 960.4 million shares compared with 1 billion Wednesday.
The Russell 2000 index of smaller companies rose 4.49, or 0.7 percent, to 629.32.
The Dow Jones industrial average rose 84 points, bringing its gains for the week to nearly 300 points.
Treasury prices fell as improvements in some economic reports eased demand for safe havens.
The Philadelphia Federal Reserve said its index of regional manufacturing rose to 17.6 in February from 15.2 in January. That follows reports the past two days that also pointed to a pickup in business at the nation's factories.
The report lifted stocks of companies that process raw materials because increased manufacturing should boost sales. Newmont Mining Corp. and glass maker Owens-Illinois Inc. each rose more than 2 percent.
The market drifted higher in light trading volume so analysts cautioned against reading too much in to the latest gain. Light volume indicates that many investors with concerns about the market are staying on the sidelines.
The market's gains were modest in the early hours of trading after Wal-Mart Stores Inc.'s reported a drop in quarterly sales at its flagship US stores and issued a disappointing forecast.
At the same time, the Labor Department reported that the number of workers seeking unemployment benefits for the first time rose 31,000 to 473,000 last week. Economists polled by Thomson Reuters forecast claims would fall. Unemployment is a major obstacle to a sustained recovery.
Investors have been buying stocks this week on growing evidence of improvement in the US economy. They have stopped worrying, at least for now, about potential overseas troubles derailing a global recovery. Investors have been concerned that debt problems in Greece and other European countries could spread. China's move to tighten lending standards and slow its growth to avoid speculative bubbles has also worried investors.
Eric Mintz, assistant portfolio manager of the Eagle Mid Cap Growth Fund in St. Petersburg, Fla., said traders were able to look past the latest jobs report because heavy snow in parts of the country has skewed some of the numbers to make unemployment look worse. He said the bulk of economic reports still signal the economy is improving.
"We're in the early phases of the recovery and you are going to get spotty data," he said.
The Dow rose 83.66, or 0.8 percent, to 10,392.90, putting its gain for the week at 294 points. The broader Standard & Poor's 500 index rose 7.24, or 0.7 percent, to 1,106.75, and the Nasdaq composite index rose 15.42, or 0.7 percent, to 2,241.71.
Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.80 percent from 3.74 percent compared late Wednesday.
The dollar mostly rose against other major currencies.
Earnings reports were mixed. Wal-Mart reported a fourth-quarter profit that topped analysts' expectations. But sales at stores open at least a year fell. The company predicted sales at stores open a year will be down as much as 1 percent or up as much as 1 percent for its US namesake stores this year. The stock fell 59 cents, or 1.1 percent, to US$53.47.
Hewlett-Packard Co. reported a better-than-expected fiscal first quarter after the market closed Wednesday. The computer and technology company, which like Wal-Mart is a component of the Dow, also forecast full-year revenue and profit that exceeds analysts' expectations. Its shares rose 69 cents, or 1.4 percent, to US$50.81.
Newmont Mining rose US$1.17, or 2.5 percent, to US$48.41, while Owens-Illinois rose 66 cents, or 2.4 percent, to US$27.81.
More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 960.4 million shares compared with 1 billion Wednesday.
The Russell 2000 index of smaller companies rose 4.49, or 0.7 percent, to 629.32.
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