Dow hits 2009 high, Wall Street surges on recovery measures


A trader works on the floor of the New York Stock Exchange before the closing bell in New York City. Wall Street stocks vaulted higher Monday as investor sentiment was helped by a Group of 20 decision to maintain stimulus measures to hasten economic rcovery from recession.

A trader works on the floor of the New York Stock Exchange before the closing bell in New York City. Wall Street stocks vaulted higher Monday as investor sentiment was helped by a Group of 20 decision to maintain stimulus measures to hasten economic rcovery from recession.

The City & My Life|AFP Wall Street stocks vaulted higher Monday as investor sentiment was helped by a Group of 20 decision to maintain stimulus measures to hasten economic recovery from recession.

The Dow Jones Industrial Average rose a hefty 203.52 points (2.03 percent) to end at 10,226.94, logging its best closing level since October 3, 2008.

The blue-chip index earlier soared to an intraday peak of 10,228.23.

The Nasdaq composite jumped 41.62 points (1.97 percent) to 2,154.06 and the broad-market Standard & Poor’s 500 index added 23.77 points (2.22 percent) to 1,093.07. The two indices are still below their October 19 closing levels.

Market sentiment was lifted by a weekend decision by G20 finance ministers to stick to emergency stimulus support measures despite signs that the world was emerging from a long financial maelstrom, analysts said.

It acted as a “impetus,” said Patrick O’Hare of Briefing.com as the ministers “tempered the market’s concerns about stimulus measures being withdrawn too soon.”

Together with last week’s US Federal Reserve announcement that interest rates will likely remain at exceptionally low levels for an extended period, it “effectively sent a message that easy money policies will remain the rule and not the exception,” O’Hare said.

Elizabeth Harrow of Schaeffer’s Investment Research said the market was also boosted by equity news as “positive developments for a pair of Dow members fanned the bullish flames.”

She cited a near reported deal between conglomerate General Electric and cable operator Comcast to create a joint venture to own GE’s NBC Universal valued at about 30 billion dollars.

Adding to market optimism was fast-food titan McDonald’s reporting a 3.3 percent rise in same-store sales for October amid robust results from around the globe which offset a weak month on the home front, she said.

Analysts at Charles Schwab & Co said the rally underscored “resiliency in the face of a disappointing October labor report” on Friday.

Wall Street stocks ended with slender gains Friday as investors shrugged off the labor report showing US unemployment jumping to 10.2 in October for the first time since 1983 despite narrowing job losses.

Some analysts say the market is gaining confidence slowly that an economic recovery will take root soon. Others say last week’s rally after two weekly losses remains fragile.

The broad US stock market is up more than 66 percent from its March 9 lows. Among gainers was GE, rising 3.39 percent to 15.85 dollars, and Comcast, gaining 3.84 percent to 15.15 dollars.

US giant Kraft Foods fell 0.93 percent to 26.53 dollars as it launched a hostile 9.8-billion-pound (16.4 billion dollar) bid for Cadbury which the British confectioner rejected as “derisory.”

The cash and stocks offer matches the terms of Kraft’s informal bid in September but changes to currency and stock market values since then made the formal bid less than the original offer of 10.2 billion pounds.

Cadbury’s US shares rose 0.42 percent to 50.71 dollars.

Aerospace group Northrop Grumman gained 2.98 percent to 53.93 dollars following its decision to sell its advisory services unit TASC.

Telecom operator Sprint Nextel jumped 20.35 percent to 3.43 dollars on reports it might be close to spending an additional one billion dollars to build out its fourth-generation wireless network.

Bonds were mixed. The yield on the 10-year US Treasury bond fell to 3.486 percent from 3.503 percent on Friday and that on the 30-year bond rose to 4.401 percent from 4.394 percent. Bond yield and prices move in opposite directions.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s