Wall Street rises on economic data
US stocks rose for a third day yesterday, hitting fresh 2009 highs in a broad-based rally following economic data that suggested a stronger-than-anticipated global recovery.
Energy and manufacturing companies were among the strongest, benefiting from data indicating improved industrial demand and a falling dollar, which makes American exports more competitive in world markets.
Shares of multinational companies gained, including General Electric, up 6.3 per cent at $17, while shares of Exxon Mobil rose 1.2 per cent to $70.34. Financial companies also were top gainers, with the S&P financial index up 3.4 per cent.
US industrial output advanced for a second consecutive month in August, while a government report showed a bigger-than-expected drop in crude inventories last week, indicating higher demand.
The economic data added to optimism about a recovery, a day after Federal Reserve Chairman Ben Bernanke said the recession was “very likely” over.
“This is a shot in the arm for recovery. This is what we’re looking for,” Jack Ablin, chief investment officer at Harris Private bank, said.
The Dow Jones industrial average was up 108.30 points, or 1.12 per cent, at 9,791.71. The Standard & Poor’s 500 Index was up 16.13 points, or 1.53 per cent, at 1,068.76. The Nasdaq Composite Index was up 30.51 points, or 1.45 per cent, at 2,133.15.
The benchmark S&P index is now up 58 per cent since hitting 12-year lows in early March and is up 18 per cent since the start of the year. The dollar, meanwhile, fell near one-year lows against a basket of currencies.
Adding to the positive tone was the latest sign that merger and acquisition activity was picking up. Adobe Systems said it plans to pay $1.8bn for Omniture, whose software analyzes Web traffic. Adobe, the maker of Photoshop and Acrobat software, is looking to turn around declining sales.
Adobe was down 6.4 per cent at $33.35, while Omniture advanced 26.3 per cent to $21.88.
Shares of healthcare companies advanced after Democrat Senator Max Baucus said his healthcare overhaul plan can pass the Senate.