Latecomers run to join Wall St’s September rally

Latecomers run to join Wall St’s September rally
Comment E-mail Print Share
First Published: Wed, Sep 29 2010. 09 17 AM IST
Updated: Wed, Sep 29 2010. 09 17 AM IST
New York: US stocks rose on Tuesday as latecomers jumped onto the September bandwagon, buying up sectors that have outperformed during the month.
The S&P 500 has risen 9.4% so far in September, historically the worst month for stocks.
“When a month takes you by surprise like this, you tend to be underexposed to stocks and overexposed in cash and bonds. And as the quarter comes to an end, people are rushing to at least have ownership of the stocks that have performed well and have a good outlook. That’s causing the aggressiveness in the market,” said Marc Pado, US market strategist at Cantor Fitzgerald & Co in San Francisco.
Sectors associated with improving economic growth have outperformed during this rally, and those stocks once again led Tuesday’s advance. The Philadelphia semiconductor index rose 1.7% for the day and was up 13.8% for the month. The small-cap Russell 2000 gained 1.1%. Among the S&P 500’s sectors, the consumer discretionary index was up 0.8%.
Boosting energy and commodity shares, spot gold prices surged to a fresh record at $1,310.10 an ounce.
The Dow Jones industrial average gained 46.10 points, or 0.43%, to end at 10,858.14. The Standard & Poor’s 500 Index rose 5.54 points, or 0.49%, to 1,147.70. The Nasdaq Composite Index advanced 9.82 points, or 0.41%, to 2,379.59.
With only two days left in September, the Dow is up 8.4% for the month.
Walgreen Co, the biggest U.S. drugstore chain, reported higher-than-expected quarterly earnings, helped by strong prescription drug sales. Its shares jumped 11.4% to $33.81.
Continuing the spurt of recent M&A activity, Endo Pharmaceuticals Holdings Inc will buy private generics maker Qualitest Pharmaceuticals for about $1.2 billion, marking its second deal in as many months. Endo shares advanced 8.1% to $33.10.
Shares of Apple Inc slid as much as 5.6% on rumors its No. 2 executive was departing for Hewlett-Packard Co, but the stock recovered as analysts dismissed the speculation.
Representatives from Apple and Hewlett-Packard declined to comment. Apple shares shed 1.5% to $286.86. HP shares closed up 0.9% at $41.63 amid speculation that the IT giant may announce a replacement for its former CEO at a financial analysts’ meeting currently being held in Palo Alto, California.
With the Nasdaq up 12.6% for the month, some analysts noted that the technology sector may be overbought on a short-term basis.
The sector broke out of its summer trading range last week, and was back above its 150-day moving average, outperforming both the wider market and defensive areas, Concept Capital said in a research note.
Wall Street had opened lower after data showed US consumer confidence fell in September to its lowest level since February, but investors quickly brushed off the bad news.
“Consumer confidence numbers are a reflection of news that we already know. It’s now all about how companies will be performing next quarter,” Pado said.
Continuing a recent trend, volume was light. Only 7.63 billion shares traded on the NYSE, Amex and Nasdaq, compared with the previous year’s daily average of 9.65 billion shares.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 7 to 3. On the Nasdaq, two stocks rose for every one that fell.
Comment E-mail Print Share
First Published: Wed, Sep 29 2010. 09 17 AM IST
More Topics: Markets | US | Stocks | Nasdaq | Tech |