New York: US stocks climbed on Wednesday as factory and home sales data raised hopes the economic downturn is moderating, sparking a broad advance.
Big manufacturers and their suppliers, such as Caterpillar Inc and US Steel Corp, rose sharply after data showed factory activity in March fell at a slower rate than the month before, while pending home sales rose more than expected in February.
The data was enough to counter a report that showed US private-sector job losses accelerated in March to 742,000, heightening concerns ahead of the government’s monthly payroll numbers on Friday.
The housing and factory data pointed to “an economy that fell off a cliff (and) that may have found a bottom,” said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
“Because we fell off a cliff, you need to get a lot of diverse areas telling us it’s not as bad this month as it was last month and that’s what’s happening.”
The Dow Jones industrial average gained 152.68 points, or 2.01%, to 7,761.60. The Standard & Poor’s 500 Index added 13.21 points, or 1.66%, to 811.08. The Nasdaq Composite Index climbed 23.01 points, or 1.51%, to 1,551.60.
On Tuesday, the S&P 500 finished its best month since October 2002 and has gained almost 20% from 12-year lows hit in early March. The rally has been fueled mainly by hopes that the economy is showing signs of stabilization.
Shares of automaker Ford rose 4.2% to $2.74 as the company said March sales declined 41%, which was better than expected. The company said the pace of the economic decline may be moderating.
After General Motors executives cited March sales data that pointed to the “first signs of brightening” in the auto industry, GM’s stock pared losses even as investors fear the struggling automaker may be headed for controlled bankruptcy.
GM’s stock fell 0.5% to $1.93, well off its session low at $1.58. The New York Times reported the government is seeking to ease GM into a “controlled” bankruptcy, but a senior official said the White House remains optimistic that GM can restructure without going to bankruptcy court.
In the financial sector, JPMorgan Chase rose 5.9% to $28.14 while Goldman Sachs gained 4% to $110.29.
Shares of homebuilders were among top gainers following the home sales data, with Centex Corp up 2.9% at $7.72. The Dow Jones home construction index gained 2%.
In the industrial sector, Caterpillar was up 3.7% at $28.99 and US Steel was up 7.1% at $22.62, while Dow Chemicals Co rose 4.5% to $8.81, boosted by news it had completed a merger with Rohm & Haas Co, creating a specialty chemicals and advanced materials company.
But gains were tempered by declines in the health-care sector after Celgene Corp forecast first-quarter earnings below estimates, prompting at least four brokerages to cut their price target on the stock.
Celgene was the top drag on the Nasdaq, down 13.4% at $38.47. The S&P health-care index slipped 0.3%. Health was the only one of 10 sectors on the Nasdaq to fall.
Trading was moderate on the New York Stock Exchange, with about 1.50 billion shares changing hands, slightly above last year’s estimated daily average of 1.49 billion, while on Nasdaq, about 2.28 billion shares traded, matching last year’s daily average.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 3 to 1, while on the Nasdaq, about two stocks rose for every one that fell.