Wall St Jumps on Economy Bets, Best Buy Optimism
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/z5gc_HHzRMQ/15281Posted on Thursday, March 26th, 2009 | In Market Commentary
U.S. stocks rose on Thursday as investors bet the U.S. economic downturn may be easing following reports on fourth-quarter economic growth and weekly jobless claims that landed roughly in line with expectations.
Standouts in the broad run-up included shares of Best Buy , up 11.3 percent to $37.24 after the electronics chain’s quarterly profit topped estimates and its yearly outlook boosted optimism about consumer spending.
Retailer Wal-Mart Stores Inc was among the top boosts on the Dow, rising more than 2 percent to $52.88, while the S&P retail index gained nearly 5 percent.
Shares of natural resources companies rose along with higher commodity prices. Shares of steel maker Nucor rose 5.6 percent to $41.25 and U.S. Steel Corp was up 5.9 percent to $24.86.
“Obviously the tide is shifting. We’ve gone from every piece of news being incrementally bad to not as bad as expectations,” said Stephanie Giroux, Chief Investment Strategist at TD Ameritrade in Jersey City, New Jersey.
“The fact that collectively we are starting to see things less negative is very significant.”
The Dow Jones industrial average added 158.42 points, or 2.04 percent, to 7,908.23. The Standard & Poor’s 500 Index rose 16.78 points, or 2.06 percent, to 830.66. The Nasdaq Composite Index jumped 47.47 points, or 3.10 percent, to 1,576.42.
At the current pace, the S&P 500 could have its biggest monthly gain in 22 years, as stocks extend a three-week rally off 12-year lows.
Investors were relieved to see fair demand for $24 billion of U.S. debt offered after a poor auction a day earlier raised fears the government would have trouble funding its plans to help the economy recover.
Shares of banks pared losses after the auction, with JPMorgan down 1 percent to $28.27, having fallen as low as $27.65, while the KBW bank index fell 0.4 percent.
Government data showed the U.S. economy contracted slightly less than expected in the fourth quarter, although corporate profits in the same quarter plunged by the biggest margin since 1994. The number of workers collecting state unemployment benefits rose to a record in the latest week.
Recent better-than-expected housing and retail sales data has given rise to hopes that the recession-stricken economy was starting to show signs of life.
March 26 (Reuters)
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