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Wall Street gains after European data; Greece downgraded

Wall Street gains after European data; Greece downgraded
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First Published: Mon, Jun 14 2010. 11 59 PM IST
Updated: Mon, Jun 14 2010. 11 59 PM IST
New York: US stocks rose on Monday as European industrial data eased concerns about a slowdown in global growth, but a debt downgrade of Greece limited gains.
Moody’s Investors Service downgraded Greece’s credit rating after midday, placing it into junk status.
Earlier, data showed euro-zone industrial output surged in April, achieving the biggest year-on-year percentage gain in almost two decades.
For the past few months, worries about debt problems in Greece and other European nations have weighed on the US stock market on concerns that the euro zone’s fiscal problems could hamper a global economic recovery.
The data spurred demand for shares of US companies that rely on overseas sales, with the euro earlier up more than 1% at a session high just below $1.23. After the Greek debt downgrade, the euro cut some of its gains and was up about 0.9% at $1.2222. Heavy equipment maker Caterpillar Inc advanced 2% to $61.46.
“The slightly better-than-expected industrial production data out of Europe, along with a bounce in the euro, have been enough to put investors in a buying mood to start the week,” said Michael Sheldon, chief market strategist of RDM Financial, in Westport, Connecticut.
Investors snapped up some chip makers’ stocks and that helped bolster the Nasdaq. Technology bellwether Intel Corpshot up 1.5% to $20.95, while a semiconductor indexadvanced 1.3%.
The Dow Jones industrial average was up 50.41 points, or 0.49%, at 10,261.48. The Standard & Poor’s 500 Index was up 6.02 points, or 0.55%, at 1,097.62. The Nasdaq Composite Index was up 17.74 points, or 0.79%, at 2,261.34.
Earlier, the Dow was up as much as 1.2%, while the S&P 500 was up as much as 1.3%, and the Nasdaq was up as much as 1.6%.
The S&P 500 was trading near the psychologically key 1,100 level, and just below 1,108, its 200-day moving average.
The rally on Wall Street follows strong advances in European and Asian stock markets, as well as the S&P 500’s 2.5% gain for last week. The S&P 500 is still down about 9% from its 23 April closing high for the year.
Shares of some airlines also rose after Deutsche Bank AG started coverage of the stocks. AMR Corp, the parent of American Airlines, was up 2.5% at $8.47 after Deutsche Bank gave it a “buy” recommendation.
US crude oil futures added 76 cents to $74.52 per barrel after Greece’s government bonds were downgraded to junk status. Earlier, oil prices had jumped over 2.5% following the European industrial production data, which helped renew optimism about a recovery and a pickup in demand for fuel.
Chevron Corp was up 0.6% at $74.40, off an earlier gain of over 1%.
BP Plc’s US-traded shares continued their slide, falling 8.3% at $31.13.
US President Barack Obama plans to press the company to set up an escrow account to pay damage claims by individuals and businesses hurt by BP’s oil spill in the US Gulf of Mexico. The British company said the cost of the spill hit $1.6 billion.
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First Published: Mon, Jun 14 2010. 11 59 PM IST
More Topics: Markets | US | Stocks | Wall Street | Greece |