×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

US stocks climb for 3rd day; oil up on weak dollar

US stocks climb for 3rd day; oil up on weak dollar
Comment E-mail Print Share
First Published: Tue, Aug 16 2011. 12 37 AM IST
Updated: Tue, Aug 16 2011. 12 37 AM IST
New York: Shares on Wall Street rose along with oil prices on Monday as acquisition news and hopes of progress in Europe’s debt crisis prompted investors to buy up assets cheapened by last week’s rout.
News that Google Inc offered to buy Motorola Mobility Holdings Inc for about $12.5 billion in cash fueled a rebound in US stocks for a third straight session.
Global equities climbed further out of their August hole on news that Japan’s economy shrank less than anticipated in the second quarter as companies made strides in restoring output following a devastating earthquake and tsunami.
“The Japanese news, while not overly encouraging, was another data point showing things are not nearly as bad as the sell-off seemed to suggest,” said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
“This is an extremely jittery market, just looking to avoid significant bad news,” he said. “I would expect there to be less volatility than we saw last week.”
The dollar’s drop to a three-week low against the euro, at $1.44779 , lent support to commodities. US crude oil rose 2%, touching a session peak just below $87.50 per barrel.
The euro rose on expectations of a positive outcome of Tuesday’s meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel to discuss Europe’s debt crisis.
The single currency was also lifted by news that the European Central Bank spent €22 billion to buy government debt last week to stem the spread of the debt crisis to Spain and Italy. It was the most the ECB had spent in a week on such purchases since it began buying debt in May 2010.
US stocks were trading higher at 11:30 pm. The Dow Jones industrial average was up 153.49 points, or 1.36%, at 11,422.51. The Standard & Poor’s 500 Index was up 18.58 points, or 1.58%, at 1,197.39. The Nasdaq Composite Index was up 26.17 points, or 1.04%, at 2,534.15.
The S&P 500 fell to a near one-year low last week as markets tumbled initially on the first-ever US credit ratings downgrade and fears that Europe’s debt woes may spread. They then rebounded with almost equal force, rising more than 6% over the last three sessions.
Analysts said the corporate sector had emerged as the most important buyers of US stocks right now.
“You’re seeing kind of a reversal from last week in financials,” said Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas.
Among Monday’s biggest gainers was Motorola Mobility, which jumped nearly 57% to $38.25 on Google’s bid. Google dropped 2.6 percent to $549.19.
The move higher came despite a gauge of manufacturing in New York State falling for a third month in a row in August as factory orders hit their lowest level since November 2010, the New York Federal Reserve said.
Separate data from the US treasury department showed foreigners unloaded US assets in June for a second straight month and were net sellers of Treasury securities for the first time in more than two years as concern about a US credit downgrade soured overseas demand.
MSCI’s all-country world stock index, a broad measure of global equities, rose nearly 2%, ratcheting up an 8 percent gain since hitting an 11-month low on Thursday.
Most US Treasuries prices were stable, while long bond prices dropped as stocks recovered and investors looked for signs of stability after last week’s volatile stocks sent buyers scurrying to US government debt.
The benchmark 10-year US Treasury note was down 4/32, with the yield at 2.2743%.
Comment E-mail Print Share
First Published: Tue, Aug 16 2011. 12 37 AM IST