Tech, financials lift Wall Street2 min read . Updated: 14 Jan 2010, 10:36 AM IST
Tech, financials lift Wall Street
Tech, financials lift Wall Street
New York: US stocks rose on Wednesday as investors bet on recently weakened technology and financial shares ahead of earnings from bellwethers Intel Corp and JPMorgan Chase & Co, taking the Dow industrials to a fresh 15-month high.
A brokerage upgrade of drugmaker Merck & Co and an upbeat outlook from Kraft Foods Inc gave an extra boost to the healthcare and consumer sectors.
After a rough start to earnings season with Alcoa Inc’s disappointing results, investors are looking for companies to meet or beat expectations to fuel a stocks rally that has lifted the S&P 500 almost 70% from its March lows.
Chipmaker Intel is scheduled to post quarterly results on Thursday and bank JPMorgan on Friday.
JPMorgan shares, up 1.8% to $44.25, led gains in the KBW bank index, while chipmaker Advance Micro Devices jumped 5.8% to $9.15 after falling nine of the last 11 sessions.
Intel shares rose 1.7% to $20.96 and a semiconductor index gained 1.6%.
“Heading into Intel and JPMorgan earnings, I think there was a sense things have sold off enough and buyers have felt more comfortable buying into semiconductors and financials," said Michael James, senior trader at Wedbush Morgan in Los Angeles.
The Dow Jones industrial average gained 53.51 points, or 0.50%, to 10,680.77. The Standard & Poor’s 500 Index added 9.46 points, or 0.83%, to 1,145.68. The Nasdaq Composite Index rose 25.59 points, or 1.12%, to 2,307.90.
The Federal Reserve said in its periodic report, the Beige Book, that while economic activity was at a low level, “conditions have improved modestly further, and those improvements are broader geographically than in the last report."
Wall Street, which had its worst session so far this year on Tuesday, fell at the open weighed down by resource shares, but the Dow got its biggest boost from Merck shares, up 3.7% to $38.93 after Credit Suisse upgraded the stock.
Kraft raised its 2009 earnings outlook and rose for most of the trading day but finished down at 0.2% to $29.23.
Chocolate maker Hershey Co was preparing a bid for Cadbury Plc that would top Kraft’s hostile $17 billion takeover offer, the Financial Times reported on Wednesday. Hershey shares fell 3% to $36.61.
Google Inc’s shares fell 0.6% to $587.09 after the Internet search giant said it may shut its China operations over censorship and hacking.
Shares of rival Chinese search engine Baidu Inc jumped 13.7% to $439.48 and led percentage gains on the Nasdaq 100.
Crude oil prices settled 1.4% lower below $80 per barrel and Chevron Corp was the biggest drag on the Dow, falling 0.8% to $79.80.
The heads of Wall Street’s biggest banks defended the lucrative pay practices and size of their businesses before a commission investigating the 2008 financial crisis.
“I think the rally (in financial shares) is more a function of gaining back yesterday’s losses than what was going on in Washington," Wedbush Morgan’s James said.
Less than 1 billion shares changed hands on the New York Stock Exchange, far below last year’s estimated daily average of 2.18 billion. On the Nasdaq, about 2.32 billion shares traded, more than last year’s daily average of 1.63 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 14 to 5, while on the Nasdaq nearly 2 stocks rose for every one that fell.