Stock markets in the United States rose yesterday amid signs the global economy was recovering and optimism that corporate earnings reports will beat expectations.
Expectations of a rebound in revenue and earnings for the recently ended third quarter fed the optimism. Quarterly earnings are due to kick off late today, with results from aluminum company Alcoa Inc.
The Dow Jones industrial average was up 131.50 points, or 1.4%, at 9731.25. The S&P 500 was up 14.26 points, or 1.4%, at 1054.72. The Nasdaq was up 35.42 points, or 1.7%, at 2103.57.
It was the market's second day of gains, after marking its second week of losses on Friday. The S&P 500 is now up about 56% since hitting 12-year lows in early March.
Duo of IBM, Intel Propels Dow's Run
he rise capped a 4% advance for the week as earnings from Alcoa fueled optimism that the third-quarter earnings season will be better than many had been expecting.
The new high came on the two-year anniversary of the Dow's October 2007 peak. The Dow closed Friday up 78.07 points, or 0.8%, at 9864.94 -- its highest in a year.
IBM was at the forefront, rising $3.64, or 3%, to $125.93 after bullish comments from a Barclays analyst. Intel (Nasdaq) climbed 29 cents, or 1.5%, to 20.17, and Advanced Micro Devices rose 37 cents, or 6.7%, to 5.88.
All three companies will be posting earnings reports in the coming week as third-quarter earnings season kicks into high gear. Investors have been betting technology companies will produce among the best earnings this quarter as they are benefiting from overseas demand.
In the period's first heavily watched report, Alcoa surprised Wall Street with a third-quarter profit. For the week, Alcoa rose 11%, though it pared some of that rise with a fall of 11 cents, or 0.8%, to 14.24, on Friday.
Investors have moved from a flight to safety to a flight to risk," said Rick Lake, portfolio manager of the Aston/Lake Partners Lasso Alternatives Fund. With money-market funds yielding close to zero, investors are moving into investments that are seen as slightly more risky -- like stocks and corporate bonds. Others are worried about missing out on the rally and are putting more money in stocks.
The Standard & Poor's 500 stock index tacked on 6.01 points, or 0.56%, to 1071.49, closing out the week up 46.28, or 4.51%, less than a point below its 2009 closing high. Despite the broad recent rally, the S&P remains 32% off its record set exactly two years ago. In the past two years, its weakest components were American International Group and MBIA.
On the other end, the more things change the more they stay the same. Its five best components since marking a record high in 2007 -- Southwestern Energy, Tenet Healthcare, Western Digital, DeVry and QLogic -- all finished Friday in the green.
Helped by the strong technology sector, the Nasdaq Composite Index rose 15.35, or 0.72%, on Friday to 2139.28, giving it a gain of 81.99, or 3.99%, for the week.
Newmont Mining fell 51 cents, or 1.1%, to 46.50 on Friday, but still ended up 10% on the week. The mining giant has risen on estimate raises from firms including Credit Suisse Group as metals prices have soared.
Cree (Nasdaq) climbed 1.99, or 5.4%, to 39.09. J.P. Morgan started coverage of the stock at overweight.
Friday, 9 October 2009
Wall St. rises on profit optimism
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