US stocks gain on signs economic recovery is strengthening
Monday, 14 December 2009
NEW YORK, Dec 13 (Bloomberg): US stocks advanced this week, overcoming concern that credit losses will rise, after data on jobless claims and retail sales signaled the economic recovery is strengthening.
Delta Air Lines Inc. and US Airways Group Inc. surged more than 9 per cent after oil extended its decline to eight days, the longest losing streak in six years. Gannett Co soared 28 per cent, the most in the Standard & Poor's 500 Index, after the newspaper publisher forecast more profit than analysts estimated. Alcoa Inc jumped 12 per cent as JPMorgan Chase & Co boosted its earnings projections for the aluminum producer.
The S&P 500 added less than 0.1 per cent to 1,106.41 after rising the final three days of the week. The Dow Jones Industrial Average rose 82.60 points, or 0.8 per cent, to 10,471.50. The Nasdaq Composite Index fell 0.2 per cent to 2,190.31.
"There is an underpinning of greater confidence than there has been for a long time," said Matthew Kaufler, a Rochester, New York-based money manager at Federated Clover Investment Advisers, which oversees $392 billion.
The S&P 500 lost a total of 1.3 per cent on Dec 7 and Dec 8 after Federal Reserve Chairman Ben S Bernanke said the US economy faces "significant headwinds," while a reduction in Greece's debt rating and a $3.65 billion loss by a Dubai developer added to speculation that global credit markets are struggling to recover.
S&P's shift to a negative outlook for Spain's debt added to that concern on Dec 9, roiling equity markets worldwide. The S&P 500 rebounded from a loss of as much as 0.6 per cent that day to climb 0.4 per cent at the 4 pm close of trading in New York, boosted by shares of 3M Co and Sprint Nextel Corp.
The index then advanced 1 per cent in the next two days after the four-week average of initial jobless claims slid to a one-year low of 473,750, retail sales climbed more than twice as fast as economists estimated and the index of consumer confidence topped estimates.
"Clearly there was a scare that there was going to be some kind of domino effect, but after the initial knee-jerk reaction, some sanity was restored and the dominos didn't begin to fall," Kaufler said, referring to Dubai, Greece and Spain. "It tells me we've come a hell of a long way in 12 months, because 12 months ago if we'd caught similar news headlines, it would have been a down-3-per cent day."
Delta, the world's biggest airline, led the Amex Airline Index to its highest level since February, as analysts signaled optimism about travel demand and oil fell to two-month low of $69.46 a barrel in New York. Delta added 13 per cent to $11.25 and US Airways climbed 9 per cent to $4.83.
Gannett increased 28 per cent to $13.16. Chief Financial Officer Gracia Martore said the USA Today publisher is likely to beat analysts' average estimate for fourth-quarter earnings. Martore, speaking at the UBS AG Global Media and Communications Conference in New York on Dec 9, said she was "comfortable" that the publisher would report earnings at the high end of the analysts' range of 48 cents to 62 cents a share.
Delta Air Lines Inc. and US Airways Group Inc. surged more than 9 per cent after oil extended its decline to eight days, the longest losing streak in six years. Gannett Co soared 28 per cent, the most in the Standard & Poor's 500 Index, after the newspaper publisher forecast more profit than analysts estimated. Alcoa Inc jumped 12 per cent as JPMorgan Chase & Co boosted its earnings projections for the aluminum producer.
The S&P 500 added less than 0.1 per cent to 1,106.41 after rising the final three days of the week. The Dow Jones Industrial Average rose 82.60 points, or 0.8 per cent, to 10,471.50. The Nasdaq Composite Index fell 0.2 per cent to 2,190.31.
"There is an underpinning of greater confidence than there has been for a long time," said Matthew Kaufler, a Rochester, New York-based money manager at Federated Clover Investment Advisers, which oversees $392 billion.
The S&P 500 lost a total of 1.3 per cent on Dec 7 and Dec 8 after Federal Reserve Chairman Ben S Bernanke said the US economy faces "significant headwinds," while a reduction in Greece's debt rating and a $3.65 billion loss by a Dubai developer added to speculation that global credit markets are struggling to recover.
S&P's shift to a negative outlook for Spain's debt added to that concern on Dec 9, roiling equity markets worldwide. The S&P 500 rebounded from a loss of as much as 0.6 per cent that day to climb 0.4 per cent at the 4 pm close of trading in New York, boosted by shares of 3M Co and Sprint Nextel Corp.
The index then advanced 1 per cent in the next two days after the four-week average of initial jobless claims slid to a one-year low of 473,750, retail sales climbed more than twice as fast as economists estimated and the index of consumer confidence topped estimates.
"Clearly there was a scare that there was going to be some kind of domino effect, but after the initial knee-jerk reaction, some sanity was restored and the dominos didn't begin to fall," Kaufler said, referring to Dubai, Greece and Spain. "It tells me we've come a hell of a long way in 12 months, because 12 months ago if we'd caught similar news headlines, it would have been a down-3-per cent day."
Delta, the world's biggest airline, led the Amex Airline Index to its highest level since February, as analysts signaled optimism about travel demand and oil fell to two-month low of $69.46 a barrel in New York. Delta added 13 per cent to $11.25 and US Airways climbed 9 per cent to $4.83.
Gannett increased 28 per cent to $13.16. Chief Financial Officer Gracia Martore said the USA Today publisher is likely to beat analysts' average estimate for fourth-quarter earnings. Martore, speaking at the UBS AG Global Media and Communications Conference in New York on Dec 9, said she was "comfortable" that the publisher would report earnings at the high end of the analysts' range of 48 cents to 62 cents a share.