US stocks rose yesterday, sending the S&P 500 to its highest close in seven months, as reassuring economic data reinforced hopes that demand will stabilise, while General Motors’ long-expected bankruptcy filing ended uncertainty about the carmaker’s fate.
Data showing that the US manufacturing sector contracted in May at a slower rate than expected fuelled hopes the US recession that began in December 2007 is moderating.
Investors were also encouraged by signs of manufacturing stabilisation from China, with demand from emerging markets for commodities and other resources seen leading a revival of global growth.
“There’s a potential for green shoots,” said Alan Lancz, president of Alan B. Lancz, referring to signs of economic stabilisation.
“The best news has been the growth in China. Investors are betting on growth stimulus from the emerging markets,” he added.
The Dow Jones industrial average shot up 221.11 points, or 2.60 per cent, to 8,721.44. The Standard & Poor’s 500 Index gained 23.73 points, or 2.58 per cent, to 942.87. The Nasdaq Composite Index jumped 54.35 points, or 3.06 per cent, to 1,828.68.
The broad-based advance extended the US stock market’s recovery from the 12-year closing low of 9 March, with the benchmark S&P 500 now up about 40 per cent since then.
The S&P 500’s gain yesterday marked its highest close since last November, and the Dow climbed to its highest finish since January. The Nasdaq had its highest close since October 2008.
The S&P 500 hit another crucial milestone, ending above its 200-day moving average for the first time since December 2007, a feat that some analysts took as possibly a harbinger of additional gains ahead.
In yesterday’s rally, the standouts included shares of big manufacturers such as Boeing, which rose 6.4 per cent to $47.70, while United Technologies added 5.1 per cent to $55.27.
Shares of energy companies also surged, with Chevron up almost 4 per cent at $69.21 as front-month US crude oil futures climbed $2.27 to settle at $68.58 a barrel