|
Dow surges 9000 Original Source Link: (May no longer be active)
http://www.msnbc.com/news/534548.asp?vts=060420031420http://www.msnbc.com/news/534548.asp?vts=060420031420
Dow Jones industrials top 9,000
Blue-chip index jumps 116, Nasdaq surges 31
By Roland Jones
MSNBC
June 4 — Stocks rallied Wednesday, with the Dow industrials closing above 9,000 for the first time in nearly 10 months, as some positive services-sector data added fuel to investors’ long-held hopes that the economy is on the cusp of a recovery.
MARKET AVERAGES RUSHED higher shortly after 10 a.m. ET, as traders reacted to a report from the Institute for Supply Management (ISM) that said activity in the vast U.S. services sector rose to 54.5 in May from 50.7 in April. The index has contracted only once in the last 16 months. (A reading above 50 indicates expansion.)
The Dow Jones industrial average closed the session up about 116 points, finishing above the 9,000 level for the first time since Aug. 22. On Tuesday, the blue-chip index rose 36 points to 8,922.95.
The Nasdaq Composite index closed up around 31 points. The tech-rich index finished Tuesday up 13 points at 1,603.56, the Nasdaq’s highest finish since May 31.
“Today’s ISM report shows the services sector continues to expand and it’s boosting the market,” said Peter Cardillo, chief strategist Global Partners Securities. “It confirms what the market has been telling us: economic activity is poised to recover.”
The expansion in the services sector followed Monday’s ISM report on manufacturing activity in May, which showed moderate improvement and appeared to verify the view that the U.S. economy will receive a boost from the Iraq war’s end.
Investors have traded stocks higher on this premise. Since hitting a mid-March low, the Standard & Poor’s 500-stock index has risen 23 percent. The index is up 12 percent so far this year.
The market was unmoved by news mid-session that domestic icon Martha Stewart, CEO and founder of Martha Stewart Living Omnimedia, has been indicted on criminal charges of securities fraud and obstruction of justice.
Stewart arrived at federal court in Manhattan Wednesday where she was indicted on nine counts of criminal charges stemming from her sale of shares of ImClone Systems, a biotech drugmaker, in December 2001. Martha Stewart Living Omnimedia rose 6 percent.
PALM TO ACQUIRE HANDSPRING
In Wednesday’s other company news, Palm, the maker of handheld computers, said it plans to acquire rival Handspring in an all-stock deal valued at $168.9 million. Palm also said it plans to spin off its PalmSource subsidiary, which develops and licenses the Palm operating system. The two deals are expected to be completed later this year.
Palm’s share price rallied 20 percent; Handspring’s stock price rose 16 percent.
Shares of Oxigene jumped 76 percent after the biopharmaceutical company said U.S. regulators will review information on its experimental thyroid cancer treatment, called Combretastatin A4 Prodrug, on a fast-track basis. The American Stock Exchange’s biotech index rose 3 percent.
Also, three technology companies — Altera, Comverse Technology and Flextronics International — were in the limelight after issuing quarterly results late Tuesday. Shares of Comverse rose 5 percent; Flextronics added 13 percent.
Before the open, the Labor Department said American companies squeezed more productivity out of their workers in the first quarter of 2003 than previously reported. U.S. non-farm productivity rose 1.9 percent in the first quarter, up from the previously reported 1.6 percent rise.
And U.S.-traded shares of automaker DaimlerChrysler fell 3 percent after the German firm cut its full-year earnings forecast, citing the impact of a ferocious U.S. price war on its Chrysler unit. Shares of other automakers, like Ford and General Motors, also slipped.
GREENSPAN UPBEAT ON ECONOMY
Stocks closed Tuesday choppy trading session with a modest gain after International Business Machines, a component of the Dow 30 index, said U.S. securities regulators are investigating accounting practices at the world’s largest computer company.
U.S. Treasury yields fell to record lows Tuesday after Federal Reserve Chairman Alan Greenspan, speaking at a bankers’ conference in Berlin via satellite, expressed confidence that the economy can mount a modest recovery but kept the door open for more reductions in short-term interest rates to insure against the possibility of deflation.
European market averages rose Wednesday, reacting to Wall Street’s rally. But Japan’s Nikkei average, which hit a three-month high on Tuesday, stanched a six-day winning streak, finishing Wednesday with a fractional loss.
The U.S. dollar was mixed, trading at 1.1671 dollars to the euro and 118.75 yen to the dollar, compared with 1.1740 dollars and 119.16 yen late Tuesday in New York.
Reuters contributed to this story.
|
|
