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CLOSING MARKET REPORT: US stocks end higher as data calms recession fears

NEW YORK – Major US stock indexes rose more than 1 per cent on Wednesday, after strong economic data calmed recession fears and helped halt a two-day sell-off.

The data, including a report that showed unexpected vigor in the job market, stoked expectations for corporate spending and sparked a robust recovery in technology shares.

The Dow Jones industrial average finished up 196.23 points, or 1.48 per cent, at 13,444.96. The Standard & Poor’s 500 Index closed up 22.22 points, or 1.52 per cent, at 1,485.01. The Nasdaq Composite Index added 46.53 points, or 1.78 per cent, to 2,666.36.

Optimism about the economy’s health also buoyed shares of manufacturers and energy producers, as well as other stocks sensitive to the economic cycle.

Home builders, one of the market’s most beaten-down sectors, were also a standout, with the Dow Jones Home construction index ending up 3.5 per cent.

On the Nasdaq, shares of Apple, the maker of the iPhone, led advancers, with a gain of 3.2 per cent to US $185.50, while software maker Microsoft ended at US$34.15, up 4.2 per cent, the biggest one-day advance in more than a month.

Shares of chip maker Intel Corp gained 3.5 per cent to US$27.22. Analysts said prospects for big-cap technology were also underpinned by hopes of continued growth abroad.

Shares of financial services companies headed higher after insurer American International Group Inc said its exposure to the housing and credit crisis was manageable. AIG shares jumped 4.9 per cent, rising US $2.70 to US$58.15 on the New York Stock Exchange. Shares of Citigroup, the No. 1 US bank, advanced 3.5 per cent to US$33.69 on the NYSE.

On the energy front, shares of oil company Exxon Mobil Corp rose 2.0 per cent to US$89.92.

Among the home builders, shares of Beazer Homes USA, the No. 7 U.S. home builder, surged 6.6 per cent to US$8.38, while shares of Hovnanian Enterprises, an upscale home builder, ended up 5.8 per cent at US$7.66.

Even so, jitters about the credit crisis lingered. Indexes cut gains briefly after ratings agency Moody’s Investors Service said mortgage insurer MBIA was at greater risk of capital shortfall than previously communicated. Shares of MBIA finished down 16.0 per cent at US$27.42. Shares of PMI Group, another mortgage insurer, declined 4.8 per cent to US$12.45.


Source: REUTERS (Business Times 6 Dec 07)


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