Wall St surges as confidence picks up
WALL Street posted its best day in eight weeks yesterday as investor mood brightened after better-than-expected factory data from the United States and China.
Investors jumped on stocks across the market, with more than six shares rising for every one that fell on the New York Stock Exchange, while on the Nasdaq, nearly five stocks rose for every one that fell. The broad Russell 3000 index had 21 advancers for each declining stock.
The Dow Jones industrial average rose 254.75 points, or 2.54 per cent, to 10,269.47. The Standard & Poor’s 500 Index added 30.96 points, or 2.95 per cent, to 1,080.29. The Nasdaq Composite Index gained 62.81 points, or 2.97 percent, to 2,176.84.
The S&P closed above its 14-day moving average for the first time since 10 Augu st which could set 1,068 as a strong short-term resistance level moving forward.
In the options market, puts outpaced calls in exchange-traded funds that track the S&P 500 index and the Nasdaq, suggesting investors are worried about the day’s sharp rally.
“This is typical of a big strong day like today. When markets go up, people put on hedges as they fear that they might see a pullback tomorrow,” said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research.
Heavy equipment maker Caterpillar, which is sensitive to changes in economic sentiment, rose 4.6 per cent to $68.16. The Dow component said it will invest $180m over two years to expand manufacturing in Brazil.
Apple shot up three per cent to $250.33, matching the Nasdaq’s gain for the day, after it introduced a new version of Apple TV and a new iPod lineup. The global economic data boosted US oil futures by nearly three per cent to settle at $73.91 a barrel and lifted the energy sector. The NYSE Arca Oil stock index rose 4.1 per cent.
Metals prices also advanced on the data, lifting copper to its highest level in more than four months.
Freeport-McMoRan Copper & Gold climbed 5.9 per cent to $76.19 and aluminum producer Alcoa, a Dow component, gained three per cent to $10.52.
Shares of Burger King shot up 14.7 per cent to $18.86. The US hamburger chain may put itself up for sale and has already talked with potential buyers, a source said. Ahead of the key payrolls data on Friday, investors shrugged off a report from ADP Employer Services showing private US companies unexpectedly cut 10,000 jobs in August.