Thursday July 23, 09:47 PM
Dow tops 9,000, Wall Street cheers earnings, data
NEW YORK (AFP) - Wall Street shares surged to their highest levels of 2009 Thursday as investors cheered upbeat housing data and a strong day for corporate earnings as signs that the economic slide may be ending.
The Dow Jones Industrial Average vaulted above 9,000 for the first time since early January, gaining 188.03 points (2.12 percent) to close at 9,069.29, the best close for blue chips since November 5.
The technology-heavy Nasdaq composite (NASDAQ: news) extended its winning streak to a 12th session, rallying 47.22 points (2.45 percent) to 1,973.60, its highest since finish October 2.
The broad-market Standard & Poor's 500 index climbed to an eight-month peak of 976.29, rising 22.22 points (2.33 percent).
Nick Perry at Schaeffer's Investment Research said investors were pumping more money into the market even after a surge over the past week that left many share values stretched.
"The fact that we are powering higher amid the overbought condition says that there is still sideline money coming in," Perry said.
"That is an interesting change from the usual behavior we have seen since last fall when the market took any excuse to sell off."
Analysts at Charles Schwab & Co. said stocks have fought back to levels not seen since January "as another report showing stabilization in the battered housing sector is combining with a big day for corporate earnings reports to reassure investors that the outlook for stocks is not as bad as initially thought."
The market, which has been riding a wave of upbeat corporate earnings reports, found more support when the National Association of Realtors said sales of existing US homes rose 3.6 percent to an annualized rate of 4.89 million units in June.
Sales were brisker than the average analyst forecast of a 4.83 million pace.
Joel Naroff at Naroff Economic Advisor said that "the turnaround in the housing market appears finally to be here and indeed may be gaining some speed."
"The markets should like this report. Investors are looking for reasons to believe earnings will rise going forward and a turn in the housing market can only improve expectations."
The market also was encouraged by earnings reports from key firms such as Ford, 3M, and AT&T (NYSE: T - news) that topped expectations, continuing a trend of positive surprises.
Fred Dickson, analyst at DA Davidson & Co. said the investors were pleased that more than 70 percent of companies reporting earnings have exceeded analyst estimates.
"The stock market has been pleased with the results which are fueling the current rally," he said. "At some point, investors will probably step back and take some profits, but right now the trend remains positive."
Other global markets also joined the rally.
In London, the FTSE 100 index of leading shares rose 1.47 percent to 4,559.8 and in Paris the CAC 40 (Paris: news) added 2.07 percent to 3,373.72, posting gains over the past nine days of 8.5 percent and 10.5 percent, respectively. In Frankfurt, the DAX (Xetra: news) advanced 2.45 percent to 5,247.28.
Among stocks in focus on Wall Street, 3M rallied 7.36 percent to 69.43 after the industrial and consumer products giant reported a quarterly profit of 783 million dollars that was down from last year, but well above most forecasts.
AT&T added 2.58 percent to 25.48 dollars on its latest profit report showing earnings of 3.19 billion dollars for the telecom giant.
Ford revved higher by 9.4 percent to 6.98 dollars after the ailing number two US automaker showed signs of turning its fortunes around.
Ford reported a quarterly profit of 2.26 billion dollars on one-time gains, as it narrowed its operating loss to 424 million dollars in results better than market expectations.
In technology, eBay paced the winners with a gain of 10.69 percent to 21.52 dollars after reporting better-than-expected net income of 327 million dollars in the past quarter.
Bonds fell on a shift to stocks. The yield on the 10-year US Treasury bond increased to 3.709 percent from 3.554 percent Wednesday and that on the 30-year bond climbed to 4.599 percent against 4.468 percent. Bond yields and prices move in opposite directions.
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