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Wall Street surges on recovery measures
November 9, 2009
Wall Street stocks jumped Monday as investor sentiment was helped by a Group of 20 decision to maintain stimulus measures to hasten economic recovery from recession.
The Dow Jones Industrial Average rose 144.95 points (1.45 percent) at 18:15 SA time to 10 168.37, a fresh high for the year, as the market maintained its strong rally last week.
The Nasdaq composite increased 29.31 points (1.39 percent) to 2 141.75 and the broad-market Standard & Poor's 500 index added 15.96 points (1.49 percent) to 1 085.26.
Some analysts say the market is gaining confidence slowly that an economic recovery will take root soon. Others say last week's rally after two weekly losses remains fragile.
Market sentiment Monday was lifted by a weekend decision by G20 finance ministers to stick to emergency stimulus support measures despite signs that the world was emerging from a long financial maelstrom, analysts said.
It acted as a "impetus," said Patrick O'Hare of Briefing.com.
"In other words, G20 finance ministers tempered the market's concerns about stimulus measures being withdrawn too soon," he said.
Together with last week's US Federal Reserve announcement that interest rates will likely remain at exceptionally low levels for an extended period, it "effectively sent a message that easy money policies will remain the rule and not the exception," O'Hare said.
Analysts at Charles Schwab & Co said the bullish market underscored "resiliency in the face of a disappointing October labor report" on Friday.
Wall Street stocks ended with slender gains Friday as investors shrugged off the labor report showing US unemployment jumping to 10.2 in October for the first time since 1983 despite narrowing job losses.
The broad US stock market is up 66 percent from its March 9 lows.
Among gainers was General Electric, rising 3.46 percent to 15.86 dollars amid reports that the conglomerate and Comcast are in talks to creating a joint venture to own GE's NBC Universal valued at about 30 billion dollars.
Comcast rose 2.74 percent to 14.98 dollars.
US giant Kraft Foods fell 0.76 percent to 26.58 dollars as it launched a hostile 9.8-billion-pound (16.4 billion dollar) bid for Cadbury which the British confectioner rejected as "derisory."
The cash and stocks offer matches the terms of Kraft's informal bid in September but changes to currency and stock market values since then made the formal bid less than the original offer of 10.2 billion pounds.
Aerospace group Northrop Grumman gained 2.22 percent to 53.53 dollars following its decision to sell its advisory services unit TASC.
Telecom operator Sprint Nextel jumped from 5.96 percent to 3.02 dollars on reports it might be close to spending an additional one billion dollars to build out its fourth-generation wireless network.
Bonds were mixed. The yield on the 10-year US Treasury bond fell to 3.491 percent from 3.503 percent on Friday and that on the 30-year bond rose to 4.399 percent from 4.394 percent. Bond yield and prices move in opposite directions. - AFP
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