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Wall Street jumps as S&P 500 breaches key level

Wall Street jumps as S&P 500 breaches key level
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First Published: Tue, Jun 15 2010. 11 52 PM IST
Updated: Tue, Jun 15 2010. 11 52 PM IST
New York: US stocks jumped on Tuesday as investors snapped up semiconductor shares after two large Taiwanese producers pointed to growing global demand, while energy issues gained on bets the sector may have seen the worst of the selling after BP’s oil spill.
Helping to lift some of the gloom over Europe’s debt crisis, Spain, Belgium and Ireland sold government debt at auctions that attracted healthy demand. That helped the euro to rally against the dollar and pushed commodity prices higher.
The S&P 500’s rise pushed the index above its 200-day moving average, a level it has struggled to breach for the last month and that signals bullish momentum.
“You are seeing renewed confidence, and it’s certainly evident in the price action in the euro,” said Tom Schrader, managing director of US equity trading at Stifel Nicolaus Capital Markets in Baltimore. “There’s definitely a trend towards returning to risky assets.”
The Dow Jones industrial average gained 166.57 points, or 1.63%, to 10,357.46. The Standard & Poor’s 500 Index rose 20.00 points, or 1.84%, to 1,109.63. The Nasdaq Composite Index added 49.73 points, or 2.22%, to 2,293.69.
Semiconductor stocks helped lift the Nasdaq after TSMC and UMC, the world’s two largest contract chipmakers, forecast growing demand in the coming months amid an improving global economy and rising sales of new personal computers and other consumer gadgets.
The positive outlook for chipmakers drove the Philadelphia semiconductor index up 5.3%.
Intel Corp, the world’s dominant chipmaker, added 2.7% to $21.45, while Broadcom Corp climbed 5.7% to $35.83, and Marvell Technology Group Ltd surged 7.5% to $18.80.
Buyers also snapped up beaten down energy names. An S&P energy stock index gained 2.4%, with the US-listed shares of BP Plc up 2.8% at $31.54.
BP America President Lamar McKay said the company will soon have six ships to remove oil siphoned from its ruptured undersea well in the Gulf of Mexico.
The euro, a barometer to assess risk appetite, rose above $1.23 versus the dollar to its best level since 3 June, even after a survey showed German investor sentiment fell more than expected.
Industrial and technology sectors, which have a large exposure to Europe, were among the leaders. Aircraft manufacturer Boeing Co shot up 3.7% to $67.20, while heavy equipment maker Caterpillar Inc added 3% to $63.21.
New York state manufacturing continued to grow in June although employment fell sharply, while in a separate report, US import prices posted their largest drop in nearly a year in May, buttressing views that inflation is tame and interest rates are likely to stay low.
Airline stocks climbed after Delta Air Lines Inc and American Airlines parent AMR Corp said second-quarter unit revenue would rise, aided by the improving economy and recovering business traffic.
Delta added 2.6% to $14.05, while AMR Corp advanced 3.8% to $8.77. The NYSE Arca Airline Index jumped 4%.
On the downside, US electronics retailer Best Buy Co dropped 6.1% to $38.57 after its quarterly profits missed estimates.
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First Published: Tue, Jun 15 2010. 11 52 PM IST
More Topics: Markets | US | Stocks | Wall Street | Dow Jones |