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US Markets Advance For the Fourth Straight Week
Written by article default Friday, 24 September 2010 13:04
U.S. Session Key Developments* Dow Gains Nearly 200 Points After Better Than Expected Durable Goods Data
* Nike Inc. Profits Significantly Beat Expectations
US Markets Advance For the Fourth Straight Week
U.S. Markets closed in positive territory at the end of the trading session and experienced a fourth straight weekly gain. US stocks advanced as a rebound in demand for capital goods and better than expected earnings at Nike Inc. eased investors’ concerns over a double-dip recession. U.S. capital equipment rebounded 4.1 percent in August from a 5.3 percent decline in July, signaling that business investment isn’t as slow as analysts had originally predicted. Durable goods orders excluding transportation climbed 2 percent in August, greater than analysts’ expectations of a one percent rise. Many investors feel that the economy will slowly get better since major companies have a great deal of cash on their balance sheets and that stocks are extremely undervalued. The markets were able to maintain their gain even though sales of new homes held steady at 288,00, slightly below expectations. The markets seemed to be at a point where they are reacting extremely positively to good news, but are not selling off on reports that are slightly below expectations. US stocks also received a boost from a German report that stated that business confidence unexpectedly rose to a three-year high in September.
DJIA 30 10,860.26 +197.84 +1.86%
The DJIA gained nearly 200 points as better than expected economic data boosted the benchmark index. Caterpillar, the world’s largest maker of construction and mining equipment advanced 4.8 percent to $73.92 for the biggest gain in the DJIA. Alcoa rallied 4 percent to $12.21, helping a gauge of materials producers to a 2.4 percent increase. Hewlett-Packard advanced 2.2 percent to $41.02. The company will likely provide a 2011 earnings forecast that exceeds the average estimate of $4.99 a share when it meets with analysts on September 28.
S&P 500 1,148.67 +23.84 +2.12%
The Standard & Poor’s 500-share index gained over 2 percent as Nike, Oracle, and Micron Tech Inc. experienced significant gains throughout the trading session. The S&P 500 has climbed 7.2 percent in September through yesterday as technology bellwethers announced buybacks, dividends and acquisitions. The index declined 5.57 percent from this year’s high in April on concern that American unemployment and widening budget deficits in Europe would slow down economic growth. Nike gained 2.8 percent after announcing that total orders for shoes and clothes for delivery between September and January grew 10 percent. Orders for China also surged 25 percent, outpacing all other regions.
NASDAQ 2,381.22 +54.14 +2.33%
The Nasdaq Composite Index had the largest gain among the three major US benchmark indices with the Financials sector leading the way with gains of over 3 percent. However, Oracle Corp. fell 0.5 percent to $26.98. The second largest software maker in the world may buy a chipmaker, announced CEO Larry Ellison. ARM Holdings Plc, the U.K. designer of chips that powers Apple Inc.’s iPhone jumped 8 percent on the announcement.
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