Broker views give US indices a boost

US STOCKS rose to fresh 13-month highs yesterday as upbeat broker views on improving prospects for two Dow components offset disappointing holiday spending outlooks from <strong>Target</strong> and <strong>Home</strong> <strong>Depot</strong>.<br /><br />Even so, the underlying tone was negative as investors fretted about the strength of the recovery and the recent rally, and more stocks fell than rose.<br /><br />Weak outlooks for the key holiday season weighed on investor psychology since consumer spending accounts for about two-thirds of US economic activity and is a key factor in corporate profits.<br /><br />The Dow Jones industrial average rose 30.46 points, or 0.29 per cent, to close at 10,437.42. The Standard &amp; Poor&rsquo;s 500 Index edged up 1.02 points, or 0.09 per cent, to 1,110.32. The Nasdaq Composite Index added 5.93 points, or 0.27 per cent, to 2,203.78.<br /><br />The three major US stock indexes initially started lower and then spent the bulk of the session near breakeven until the last half-hour of trading, when gains in the technology and energy sectors helped spur some upward momentum.<br /><br />In Nasdaq trading, shares of software maker <strong>Microsoft</strong> gained 2 per cent to $30 &ndash; an 18-month closing high &ndash; after Morgan Stanley raised its price target on the stock and said it was upbeat on the prospects for Windows 7 and the company&rsquo;s holiday season.<br /><br />Shares of <strong>Exxon Mobil</strong> rose 0.8 per cent to $75.03 after Barclays raised its recommendation on the stock to &ldquo;overweight&rdquo; from &ldquo;equal-weight&rdquo;. Both Microsoft and Exxon are components of the 30-stock Dow Jones industrial average.<br /><br />But shares of <strong>Home Depot </strong>fell 2.4 per cent to $26.99 after the leading US home improvement chain gave a forecast that suggested weaker results at the end of the year and predicted no meaningful recovery until the second half of 2010. <br /><br /><strong>Target</strong> forecast a quarterly profit that could fall short of Wall Street&rsquo;s estimates, saying early November results showed tepid consumer demand. <br /><br />The stock dropped 3 per cent to $48.77, while the S&amp;P consumer discretionaries index shed 0.7 per cent. The S&amp;P retail index dropped 1.4 per cent.<br /><br />Data showing that US industrial output rose less than expected in October was another headwind, overshadowing news that the Producer Price Index, a gauge of wholesale inflation, was tame last month.<br /><br />With Tuesday&rsquo;s slim gain, the S&amp;P 500 is up 64.1 per cent from its 12-year closing low of 9 March.<br />