US stocks gain, Dow caps best month since 2002
Sunday, 2 August 2009
NEW YORK, August 1 (Bloomberg): US stocks rose, extending the Dow Jones Industrial Average's best monthly gain since 2002, as better-than-estimated gross domestic product spurred speculation the economy is recovering from the recession.
General Electric Co., Bank of America Corp. and Alcoa Inc. helped lead the Dow higher as the Commerce Department said the economy shrank at a 1 per cent annual rate last quarter, better than the 1.5 per cent slump forecast by economists.
Ford Motor Co. jumped 8.3 per cent on speculation the government's "cash for clunkers" program is boosting demand for cars. The dollar declined to the lowest level this year against six major trading partners, while metals, oil and Treasuries advanced.
The Standard & Poor's 500 Index gained 0.1 per cent to 987.48 at 4:06 p.m. in New York, the highest since Nov. 4. It rose 7.4 per cent in July for a fifth straight monthly advance, the longest streak since 2007. The Dow rose 17.15 points, or 0.2 per cent, to 9,171.61 and added 8.6 per cent in July.
"Anytime it beats consensus, you're going to get a positive reaction in the market," Thomas Nyheim, a Greenville, Delaware- based fund manager for Christiana Bank & Trust Co., which oversees $4.5 billion, said of the GDP report. "The market's valuation is still good and earnings reports are beating expectations. The consensus that's taken place is that the recession is easing."
Equities also gained after the International Monetary Fund predicted a "gradual" recovery in the US economy and the House approved a measure to add $2 billion to the "cash for clunkers" car-purchase incentive programme.
The advance extended the S&P 500's rally since July 10 to more than 12 per cent, spurred by the most companies beating analysts' second-quarter profit estimates since records began in 1993.
More than three out of four companies in the S&P 500 that released results since June 17 exceeded earnings projections for the second quarter, data compiled by Bloomberg show. They've beaten forecasts by an average 10 per cent, even as per-share earnings tumbled 32 per cent and sales slid 16 per cent.
Washington Post Co. surged 7.7 per cent, the most since March, to $451.50. The newspaper owner posted a second-quarter profit, after a loss a year earlier, as increased demand for higher-education programs boosted revenue at its Kaplan education division.
Walt Disney Co. had the biggest drop in the Dow, losing 4.2 per cent to $25.12. The world's biggest media company reported third-quarter revenue of $8.6 billion, missing the average analyst estimate, as the recession cut advertising and theme- park sales. JPMorgan Chase & Co. downgraded the shares to "underweight" from "neutral."
General Electric Co., Bank of America Corp. and Alcoa Inc. helped lead the Dow higher as the Commerce Department said the economy shrank at a 1 per cent annual rate last quarter, better than the 1.5 per cent slump forecast by economists.
Ford Motor Co. jumped 8.3 per cent on speculation the government's "cash for clunkers" program is boosting demand for cars. The dollar declined to the lowest level this year against six major trading partners, while metals, oil and Treasuries advanced.
The Standard & Poor's 500 Index gained 0.1 per cent to 987.48 at 4:06 p.m. in New York, the highest since Nov. 4. It rose 7.4 per cent in July for a fifth straight monthly advance, the longest streak since 2007. The Dow rose 17.15 points, or 0.2 per cent, to 9,171.61 and added 8.6 per cent in July.
"Anytime it beats consensus, you're going to get a positive reaction in the market," Thomas Nyheim, a Greenville, Delaware- based fund manager for Christiana Bank & Trust Co., which oversees $4.5 billion, said of the GDP report. "The market's valuation is still good and earnings reports are beating expectations. The consensus that's taken place is that the recession is easing."
Equities also gained after the International Monetary Fund predicted a "gradual" recovery in the US economy and the House approved a measure to add $2 billion to the "cash for clunkers" car-purchase incentive programme.
The advance extended the S&P 500's rally since July 10 to more than 12 per cent, spurred by the most companies beating analysts' second-quarter profit estimates since records began in 1993.
More than three out of four companies in the S&P 500 that released results since June 17 exceeded earnings projections for the second quarter, data compiled by Bloomberg show. They've beaten forecasts by an average 10 per cent, even as per-share earnings tumbled 32 per cent and sales slid 16 per cent.
Washington Post Co. surged 7.7 per cent, the most since March, to $451.50. The newspaper owner posted a second-quarter profit, after a loss a year earlier, as increased demand for higher-education programs boosted revenue at its Kaplan education division.
Walt Disney Co. had the biggest drop in the Dow, losing 4.2 per cent to $25.12. The world's biggest media company reported third-quarter revenue of $8.6 billion, missing the average analyst estimate, as the recession cut advertising and theme- park sales. JPMorgan Chase & Co. downgraded the shares to "underweight" from "neutral."