US stocks rise as Dow posts best two-week gain in nine years
Monday, 27 July 2009
NEW YORK, July 26 (Bloomberg): US stocks rose, completing the steepest two-week rally for the Dow Jones Industrial Average since 2000, as companies beat profit estimates and an increase in home resales signaled an economic recovery may be underway.
Caterpillar Inc. soared 24 per cent after reporting earnings that tripled analysts' projections, and EBay Inc. rallied on results that signaled consumers' appetite for online commerce is rebounding. Homebuilders in the Standard & Poor's 500 Index climbed 11 per cent as sales increased for a third month. All 40 energy companies in the S&P 500 rallied.
The S&P 500 added 4.1 per cent to 979.26. The Dow average jumped 349.30 points, or 4 per cent, to 9,093.24, topping 9,000 for the first time since January and extending its rally since July 10 to 12 per cent. The Nasdaq Composite Index gained 4.2 per cent to 1,965.96. Its 12-day winning streak, the longest since 1992, ended yesterday as Microsoft Corp. dropped.
"The rally's been a surprise to everyone, including the bulls," said Philip Dow, the Minneapolis-based director of equity strategy at RBC Wealth Management, which oversees $112 billion. "What's driving the market is positive earnings surprises, and the economic tea leaves are telling us the recovery is at hand."
Companies from American Express Co. to 3M Co. reported second-quarter results that topped estimates, suggesting the worst recession in a half century is abating. Seventy-five per cent of the companies in the S&P 500 that have released results surpassed predictions, according to data compiled by Bloomberg. That would be the highest rate ever for a full quarter, Bloomberg data going back to 1993 show.
Walt Disney Co., Exxon Mobil Corp. and Chevron Corp. are among 150 companies in the S&P 500 scheduled to report next week.
The S&P 500 has erased more than half its loss since the Sept. 15 collapse of Lehman Brothers Holdings Inc. The benchmark index for US equities has climbed 45 per cent from a 12-year low on March 9 after the nation's largest banks were profitable to start the year and the US government and Federal Reserve pledged $12.8 trillion to revive growth.
Investors are pouring money into shares on speculation the fastest rally since the Great Depression will reverse losses from last year, when the S&P 500 fell 38 per cent. US mutual funds received $1.5 billion of net inflows this week, the second-highest amount since February 2008, according to AMG Data Services in Arcata, California.
All 10 industries rose this week, led by raw-materials producers, as existing-home sales rose in June for a third straight month, climbing to the highest level since October. The Conference Board's gauge of the economy's prospects in the next three to six months increased 0.7 per cent, more than forecast. Standard Pacific Corp., the US homebuilder that gets most of its revenue from California, added 37 per cent to $3.12.
Caterpillar Inc. soared 24 per cent after reporting earnings that tripled analysts' projections, and EBay Inc. rallied on results that signaled consumers' appetite for online commerce is rebounding. Homebuilders in the Standard & Poor's 500 Index climbed 11 per cent as sales increased for a third month. All 40 energy companies in the S&P 500 rallied.
The S&P 500 added 4.1 per cent to 979.26. The Dow average jumped 349.30 points, or 4 per cent, to 9,093.24, topping 9,000 for the first time since January and extending its rally since July 10 to 12 per cent. The Nasdaq Composite Index gained 4.2 per cent to 1,965.96. Its 12-day winning streak, the longest since 1992, ended yesterday as Microsoft Corp. dropped.
"The rally's been a surprise to everyone, including the bulls," said Philip Dow, the Minneapolis-based director of equity strategy at RBC Wealth Management, which oversees $112 billion. "What's driving the market is positive earnings surprises, and the economic tea leaves are telling us the recovery is at hand."
Companies from American Express Co. to 3M Co. reported second-quarter results that topped estimates, suggesting the worst recession in a half century is abating. Seventy-five per cent of the companies in the S&P 500 that have released results surpassed predictions, according to data compiled by Bloomberg. That would be the highest rate ever for a full quarter, Bloomberg data going back to 1993 show.
Walt Disney Co., Exxon Mobil Corp. and Chevron Corp. are among 150 companies in the S&P 500 scheduled to report next week.
The S&P 500 has erased more than half its loss since the Sept. 15 collapse of Lehman Brothers Holdings Inc. The benchmark index for US equities has climbed 45 per cent from a 12-year low on March 9 after the nation's largest banks were profitable to start the year and the US government and Federal Reserve pledged $12.8 trillion to revive growth.
Investors are pouring money into shares on speculation the fastest rally since the Great Depression will reverse losses from last year, when the S&P 500 fell 38 per cent. US mutual funds received $1.5 billion of net inflows this week, the second-highest amount since February 2008, according to AMG Data Services in Arcata, California.
All 10 industries rose this week, led by raw-materials producers, as existing-home sales rose in June for a third straight month, climbing to the highest level since October. The Conference Board's gauge of the economy's prospects in the next three to six months increased 0.7 per cent, more than forecast. Standard Pacific Corp., the US homebuilder that gets most of its revenue from California, added 37 per cent to $3.12.