Written by Reuters
Wednesday, 07 October 2009 07:29
NEW YORK: Stocks rose on Tuesday, Oct 6 amid signs the global economy was recovering and optimism that corporate earnings reports will beat expectations, according to Reuters.
Australia became the first G20 country to raise interest rates since the onset of the financial crisis, saying that the worst danger for the economy had passed, which underscored for many that the global economy was on the mend.
The economic optimism spurred gains in energy and other commodities, lifting shares of oil and resource companies. Shares of Exxon Mobil Corp rose 1.6 percent to US$68.66 and were among the top gainers on the Dow.
The hike in a key lending rate by the Australian central bank "is a confirmation that things are picking up in my opinion," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland. "It's a good barometer as to what is going on in that part of the world."
Expectations of a rebound in revenue and earnings for the recently ended third quarter fed the optimism. Quarterly earnings are due to kick off late Wednesday, with results from aluminum company Alcoa Inc. Its shares were up 3.5 percent to US$13.89. For a graphic on earnings, see here
The Dow Jones industrial average was up 131.50 points, or 1.37 percent, at 9,731.25. The Standard & Poor's 500 Index was up 14.26 points, or 1.37 percent, at 1,054.72. The Nasdaq Composite Index was up 35.42 points, or 1.71 percent, at 2,103.57.
It was the market's second day of gains, after marking its second week of losses on Friday. The S&P 500 is now up about 56 percent since hitting 12-year lows in early March.
"I think expectations going into the quarter are for a fairly positive earnings season. Last quarter about 70 percent of companies beat estimates on the heels of aggressive cost cutting and very weak consensus estimates," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Since the economy has shown some signs of improvement since then, it's reasonable to think corporate results will do better, he said.
Third-quarter earnings for S&P 500 companies are still expected to have declined 24.8 percent from a year ago, according to data from Thomson Reuters.
After the close, shares of Yum Brands Inc, the parent of Taco Bell and other fast-food chains, rose 3.9 percent to US$36.20 after it reported a profit that beat expectations and raised its full-year earnings forecast.
Benchmark U.S. gold futures scaled an all-time high at US$1,045 an ounce on Tuesday, adding to gains in commodity-related shares. Freeport-McMoRan Copper & Gold Inc advanced 3.4 percent at US$69.61.
Shares of industrial companies sensitive to the economy's cycles also rose. Shares of United Technologies Corp, the world's largest maker of elevators and air conditioners, climbed 1.8 percent at US$61.49.
On Nasdaq, Microsoft Corp increased 1.9 percent to US$25.11 after introducing new software for mobile phones to compete with Apple Inc's iPhone. Apple shares rose 2.1 percent at US$190.01. - Reuters
October 7, 2009
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- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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