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Dow keeps momentum from eight-week rally

Dow keeps momentum from eight-week rally
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First Published: Tue, Apr 27 2010. 08 11 AM IST
Updated: Tue, Apr 27 2010. 08 11 AM IST
New York: US stocks were mixed on Monday, with the Dow keeping momentum from an eight-week-old rally amid upbeat earnings from bellwether stock Caterpillar and optimism over an aid plan for Greece that buoyed global markets.
The Dow Jones Industrial Average rose 0.75 points (0.01%) to finish at 11,205.03 at the close, extending last week’s gain of 1.68%.
The tech-rich Nasdaq composite was down 7.20 points (0.28%) at 2,522.70 and the broad-market Standard & Poor’s 500 index slipped 5.23 points (0.43%) to 1,212.05.
“The stock market has been playing a bullish tune for 11 weeks and seems unconcerned about how high up it is and for how long it has been dancing,” said Al Goldman of Wells Fargo Advisors.
Capping the gains was caution over economic news to come later in the week, including a meeting of the Federal Reserve’s interest rate-setting Federal Open Market Committee.
Global markets were also mostly higher as investors took on more risks amid signs of progress in the Greek debt crisis, analysts said.
The market also digested news that the US government would start selling 1.5 billion shares in Citigroup, as the bailed-out banking group begins one of the biggest stock sales in history, in a sign of improving market conditions.
Meanwhile, heavy equipment maker Caterpillar, which is seen as an economic bellwether, reported it swung to a profit of $233 million dollars in the past quarter from a loss a year earlier. Excluding special charges, the results were better than expected and the group raised its outlook for the coming months.
“First quarter earnings season continues to shape up much better than expected,” said Fred Dickson, market strategist at DA Davidson & Co.
“The big name sector component members of the S&P 500 have almost universally topped analysts’ earnings estimates for the quarter with most beating revenue estimates.
Earnings news appears to be topping the flow of troubling news coming out of Greece and other more minor concerns such as the potential impact of financial regulatory reform on Wall Street.”
Dow member Caterpillar paced the gainers, rising 4.17% to $71.65, hovering near a 52-week high.
Ford revved up by 1.76% to 14.46 dollars, as traders shook off news of a recall of 38,000 US vehicles.
Citigroup fell 5.14% to $4.61 on concerns of dilution of existing share values following the sale of the US government stake in the banking giant.
Bonds firmed. The yield on the 10-year US government bond eased to 3.805 % from 3.817% Friday while that on the 30-year bond fell to 4.665 % against 4.668%. Bond yields and prices move in opposite directions.
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First Published: Tue, Apr 27 2010. 08 11 AM IST
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