MARKET SNAPSHOT: U.S. Stocks Rally On Hopes For Economic Growth

Date : 09/01/2010 @ 4:39PM
Source : Dow Jones News
Stock : Burger King Holdings (BKC)
Quote : 23.99  0.0 (0.00%) @ 2:05AM

MARKET SNAPSHOT: U.S. Stocks Rally On Hopes For Economic Growth

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By Kate Gibson

U.S. stocks surged Wednesday after a reading on manufacturing activity climbed in August, defying expectations of a decline and helping to calm worries about the direction of the economy.

Bouncing back from their biggest August slide in nine years, the major stock indexes climbed after the Institute for Supply Management reported its index of factory activity rose to 56.3 last month from 55.5 the prior month. Readings above 50 signal growth.

"It's a sigh of relief that today's data wasn't worse, and we did see the August ISM manufacturing index go up, counter to all expectations," said Robert Dye, senior economist at PNC Financial Services.

The Dow Jones Industrial Average (DJI) rose 254.75 points, or 2.5%, to 10,269.47, with all 30 of its components tallying gains.

Bank of America Corp. (BAC), up 6%, and heavy-equipment maker Caterpillar Inc. (CAT), up 4.6%, led the advance.

"The market is starting to have second thoughts about the double dip. We will see positive but weak economic growth for the remainder of this year, but not a double dip," said Dye.

The S&P 500 Index (SPX) gained 30.96 points, or 3%, to 1,080.29, with the industrial and consumer-discretionary sectors pacing the rise among its 10 industry groups.

The Nasdaq Composite Index (RIXF) climbed 62.81 points, or 3%, to end at 2,176.84.

For every stock on the decline, six rose on the New York Stock Exchange, where 1.2 billion shares traded.

Crude Moves

On the New York Mercantile Exchange, crude-oil futures added $1.99 to $73.91 a barrel, while gold futures lapsed 0.2% to finish at $1,248.10 an ounce.

Shares of Burger King Holdings Inc. (BKC) rallied 14.7% on reports the fast-food chain was in talks with 3G Capital Management LLC about a possible buyout. .

Apple Inc. (AAPL) shares gained almost 3% after the technology company's CEO Steve Jobs announced a new line of iPods.

Less promising were sales of automobiles in August, with General Motors Co. reporting sales fell 7% from the prior month, when consumers took advantage of government rebates.

Data from overseas also bolstered sentiment, with purchasing managers' data from China and a report of economic expansion from Australia helping offset worries about the global recovery.

The market's rise comes two days ahead of the government's monthly employment report, with Federal Reserve Bank of Dallas President Richard Fisher on Wednesday saying uncertainty about taxes is among the factors holding hiring back. .

 
 



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