Wall Street cheers as markets surge
US stocks surged yesterday, sending the Dow industrials above the key 9,000 mark for the first time since January, as strong corporate profits and rebounding home sales spurred optimism about the economy.
The broad-based rally helped all 10 of the S&P 500’s benchmark sectors finish the day in positive territory.
Strong profits from bellwethers such as diversified manufacturer 3M and telecommunications company AT&T provided further evidence that second-quarter earnings were more upbeat than initially thought.
The market extended opening gains after data showed US existing home sales rose in June — the first time since 2004 that this measure has risen three months in a row. The Dow Jones US home construction index jumped 4.9 per cent.
The Nasdaq registered its 12th straight day of gains, its longest winning streak since 1992.
“What I like about the rally that we’ve seen so far is the breadth of it. It’s not really confined to a single sector. It’s broadly spread. That gives me confidence,” said John Coyne, president of Philadelphia-based Brinker Capital, with $8bn under management.
“It’s been a wonderful run-up here. It’s certainly helping to restore investor confidence, given the trauma that people went through.”
The Dow Jones industrial average shot up 188.03 points, or 2.12 per cent, to 9,069.29 – its highest close since November 2008. It was its first close above 9,000 since January 2009.
The Standard & Poor’s 500 Index gained 22.22 points, or 2.33 per cent, to 976.29. The Nasdaq Composite Index climbed 47.22 points, or 2.45 per cent, to 1,973.60.
The string of good news helped the S&P 500 punch through a critical technical resistance level at 960, sparking a rally that lifted the benchmark index to 979.42 – its highest intraday level in eight months.
That breakout, according to some analysts, was an indication that the S&P 500 could take aim at the 1,000 mark. The S&P 500 is now up 44.3 per cent since its 12-year closing low on March 9.
3M’s stock rose 7.4 per cent to $69.43 and contributed the most to the Dow’s gain, after manufacturer’s profit beat analyst expectations.