views

US enjoys positive company reports

US STOCKS rose yesterday as solid corporate profit reports and a drop in the number of Americans on jobless benefits gave investors reasons to buy equities following the S&amp;P 500&rsquo;s two days of losses.<br /><br />The market&rsquo;s rally pushed the benchmark S&amp;P 500 index earlier in the session to its highest intraday level in almost nine months, putting it less than 4 points away from the psychologically important 1,000 level. The Nasdaq briefly rose above 2,000 for the first time since October.<br /><br />But shares lost ground at the close and finished off the day&rsquo;s highs.<br /><br />The stock market&rsquo;s advance was underpinned by strong demand for the Treasury Department&rsquo;s auction of a record $28bn of 7-year notes. Strong bids on US debt diminish the chance of a rise in borrowing costs.<br /><br />The gains were broad-based, but a surge in commodity prices gave an extra boost to raw materials shares. The Reuters/Jefferies CRB index, a gauge of 19 commodities&rsquo; prices, rose 3.9 per cent, its biggest daily per centage gain since mid-March. The S&amp;P materials index jumped 3 per cent.<br /><br />Companies reporting better-than-expected results yesterday included <strong>MasterCard</strong>, up 3 per cent at $194.11, and industrial conglomerate <strong>Tyco International,</strong> up 2.9 per cent at $29.64.<br /><br />Shares of <strong>Motorola</strong> shot up 9.4 per cent to $7.19 as the world&rsquo;s No. 3 cellphone maker behind <strong>Nokia</strong> and <strong>Samsung</strong> cut costs and shipped more phones than expected, and beat analysts&rsquo; expectations.<br /><br />&ldquo;We are now in a market where the momentum is so strong that people typically say (it) is overbought,&rdquo; said Steve Goldman, market strategist at Weeden &amp; Co.<br /><br />&ldquo;In actuality, it&rsquo;s the type of strength that leads to further gains, and pullbacks tend to be shallow.&rdquo;<br /><br />The Dow Jones industrial average added 83.74 points, or 0.92 per cent, to close at 9,154.46. The Standard &amp; Poor&rsquo;s 500 Index rose 11.60 points, or 1.19 per cent, to 986.75. The Nasdaq Composite Index gained 16.54 points, or 0.84 per cent, to 1,984.30.<br /><br />The S&amp;P 500 is up 45.9 per cent from the 12-year closing low of March 9, but it&rsquo;s still down 37.4 per cent from its record high close in October 2007.