Wall St rises despite Middle East unrest
US investors piled on a dizzying two-year advance in stocks yesterday, using a brief slip on negative economic news as an opportunity to buy into market leaders.
The technology sector showed strength, with Nvidia up 9.8 per cent to $25.68 a day after posting a bullish revenue forecast on accelerating sales of its processors.
An index of semiconductors’ shares gained 1.4 per cent and is now up 21.3 per cent since early December, around the time when the most recent leg of the run-up started.
The S&P energy sector gained 0.8 per cent. US crude futures jumped 1.7 per cent as unrest in the Middle East kept focus on supply, boosting shares of energy companies.
Futures had dipped early in the session after data showed both a rise in consumer prices and new claims for unemployment benefits, but the dip didn’t last long after the open.
“People have been focusing on the positives like the outlook for corporations and a good earnings season,” said Brian Lazorishak, a money manager at Chase Investment Counsel in Charlottesville, Virginia.
Stocks continued to ignore Iran’s intention to send two navy vessels through the Suez Canal to the Mediterranean in a move Israel has called a “provocation”.
“Geopolitical issues have been pushed aside, maybe prematurely,” Lazorishak said.
The S&P 500 has doubled its value in less than two years, the quickest 100 percent gain since the Great Depression.
However, volume has been light in the most recent leg of the rally, with just 6.7 billion shares changing hands Thursday on the New York Stock Exchange, NYSE Amex and Nasdaq combined – the second-lowest so far in 2011.
The Dow Jones industrial average gained 29.97 points, or 0.24 per cent, to 12,318.14.
The Standard & Poor’s 500 Index rose 4.11 points, or 0.31 per cent, to 1,340.43. The Nasdaq Composite Index added 6.02 points, or 0.21 per cent, to 2,831.58.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about five to three, while on the Nasdaq, about three stocks rose for every two that fell.
The S&P 500 faces little technical resistance before the 1,361 area that marks the 76.4 per cent retracement of its slide from the 2007 highs to the low hit on March 6, 2009.
A Fibonacci projection of the latest leg of the rally also draws a target near 1,361, suggesting the S&P could face strong resistance at that level.