NEW YORK (Reuters) - Stocks rallied for a third session on Wednesday after a surprise gain in January retail sales suggested consumer spending was holding up even as other data has pointed to a recession.
The technology sector surged after Applied Materials (AMAT.O), forecast strong orders for its chip-making equipment, sending the semiconductor index (.SOXX) up 3 percent.
Government data showing higher retail sales last month bucked economists' expectations for a decline. The report also took investors by surprise because it followed an anemic January jobs report and a shrinking services sector.
Consumer spending fuels 70 percent of U.S. economic activity.
Industrial companies, which are particularly dependent on economic growth, were among the top-weighted gainers on Wednesday. Diversified manufacturer 3M (MMM.N) rose 2.6 percent.
"So much attention is focused on recession anxiety, and anything that mutes those concerns is very positive for the stock market," said Eric Kuby, chief investment officer, North Star Investment Management Corp in Chicago. "It's giving more confidence in the economically sensitive stocks, the energy companies and the General Electrics of the world."
The Dow Jones industrial average (.DJI) was up 178.83 points, or 1.45 percent, at 12,552.24. The Standard & Poor's 500 Index (.SPX) was up 18.35 points, or 1.36 percent, at 1,367.21. The Nasdaq Composite Index (.IXIC) was up 53.89 points, or 2.32 percent, at 2,373.93.
Despite the sharp gains in the indexes, the trading volume suggested investors are still cautious. About 1.41 billion shares changed hands on the New York Stock Exchange, well below last year's estimated daily average of 1.9 billion. On Nasdaq, about 2.21 billion shares traded, above last year's daily average of 2.17 billion.
Shares of General Electric Co (GE.N) rose 1.8 percent to $34.98, while Chevron Corp (CVX.N) climbed 2 percent to $82.12.
The retail sales data, however, didn't help shares of online diamond jeweler Blue Nile (NILE.O), which gave a disappointing earnings outlook late on Tuesday. Blue Nile stock slumped 17.1 percent to $44.67.
Shares of Applied Materials rose 10.2 percent to $19.91.
Adding steam to the tech-sector rally were media reports that Rupert Murdoch's News Corp (NWSa.N) is in talks to combine MySpace and other Internet properties with Yahoo Inc (YHOO.O) to fend off a takeover bid from Microsoft Inc (MSFT.O) for the Internet media company.
Yahoo shares rose 1.1 percent to $29.88. Other big gainers on the Nasdaq were shares of Apple Inc (AAPL.O) , up 3.6 percent to $129.40, and Research in Motion Ltd (RIMM.O), maker of the BlackBerry, up 5.8 percent to $96.76.
In other corporate news, Genentech Inc's (DNA.N) shares rose 1.3 percent to $70.85 after it said that its cancer drug Avastin met a primary goal in a study for treating breast cancer.
Shares of alternative energy company First Solar Inc (FSLR.O) surged 30.13 percent to $228.46, after the maker of thin-film solar equipment posted a quarterly profit that eclipsed Wall Street's forecasts.
No comments:
Post a Comment