Recent leaders juice up Wall Street

Recent leaders juice up Wall Street

New York: US investors piled on a dizzying two-year advance in stocks on Thursday, using a brief slip on negative economic news as an opportunity to buy into market leaders.

The technology sector showed strength, with Nvidia Corp up 9.8% to $25.68 a day after posting a bullish revenue forecast on accelerating sales of its processors.

Loading Video...

An index of semiconductors’ shares gained 1.4% and is now up 21.3% since early December, around the time when the most recent leg of the run-up started.

The S&P energy sector gained 0.8%. US crude futures jumped 1.7% as unrest in the Middle East kept focus on supply, boosting shares of energy companies.

Futures had dipped early in the session after data showed both a rise in consumer prices and new claims for unemployment benefits, but the dip didn’t last long after the open.

“People have been focusing on the positives like the outlook for corporations and a good earnings season," said Brian Lazorishak, a money manager at Chase Investment Counsel in Charlottesville, Virginia.

Stocks continued to ignore Iran’s intention to send two navy vessels through the Suez Canal to the Mediterranean in a move Israel has called a “provocation".

“Geopolitical issues have been pushed aside, maybe prematurely," Lazorishak said.

The S&P 500 has doubled its value in less than two years, the quickest 100% gain since the Great Depression. However, volume has been light in the most recent leg of the rally, with just 6.7 billion shares changing hands Thursday on the New York Stock Exchange, NYSE Amex and Nasdaq combined -- the second-lowest so far in 2011.

The Dow Jones industrial average gained 29.97 points, or 0.24%, to 12,318.14. The Standard & Poor’s 500 Index rose 4.11 points, or 0.31%, to 1,340.43. The Nasdaq Composite Index added 6.02 points, or 0.21%, to 2,831.58.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 3, while on the Nasdaq, about three stocks rose for every two that fell.

The S&P 500 faces little technical resistance before the 1,361 area that marks the 76.4% retracement of its slide from the 2007 highs to the low hit on 6 March, 2009.

A Fibonacci projection of the latest leg of the rally also draws a target near 1,361, suggesting the S&P could face strong resistance at that level.

Dr Pepper Snapple Group Inc posted quarterly profit that beat estimates and gave an upbeat forecast and its shares jumped 5.7% to $36.20.

Its competitor Coca Cola Co was the top gainer in the Dow industrials, up 1.8% to $64.55. Coke also announced an increase in its dividend.

Data showed US core consumer prices rose at the quickest pace in 15 months in January but economists said the turnaround in prices was unlikely to derail the Federal Reserve’s plan to continue pumping money into the economy.

That excess liquidity has been one of the main drivers of the stocks rally in recent months.

A separate report showed factory activity in the US Mid-Atlantic region rose in February to its highest since January 2004, with an employment subindex reaching its highest point since April 1973.