Gains see US market shake off doldrums

Gains see US market shake off doldrums

Stocks rose sharply today, giving the market its fourth straight week of gains, after a sharp increase in orders for manufactured goods allowed investors to shake off several days of doldrums.

The Dow Jones industrial average jumped nearly 200 points, its first gain in three days. The market has now had its longest weekly winning streak since stocks rose to their highest levels of the year in late April.

A surprise jump in durable goods orders and corporate spending provided the boost to US stocks, as did a strong earnings report from Nike. In Europe, shares also rose after German business confidence rose unexpectedly to its highest level in over three years.

Gold prices climbed again, briefly touching 1,300 US dollars an ounce, as many investors remained cautious. The dollar and Treasury prices fell.

Industrial stocks including General Electric, Caterpillar and United Technologies gained after the Commerce Department reported that orders for durable goods excluding transportation rose last month at their fastest pace in five months. The increase was double what economists polled by Thomson Reuters had expected.

Stocks have been volatile in recent sessions as investors react to the latest pieces of economic data. Much of the economic news throughout September has been better than expected, pushing major indexes sharply higher during the month after a big sell-off in August.

Zahid Siddique, an associate portfolio manager at Gabelli Equity Trust, said traders are only reacting to the latest news because there still is not certainty about the pace of recovery.

“Based on the daily data they get, they move the market one way or another,” Siddique said.

Today’s upbeat manufacturing report, particularly a jump in corporate spending, is what traders have zeroed in on to send stocks higher, he said.

The Dow Jones industrial average rose 197.84, or 1.9%, to close at 10,860.26. The Dow has risen 8.4% in September, but is only up 4.1% for the year and is still 3.1% below its 2010 high, reached on April 26.

The Standard & Poor’s 500 index rose 23.84, or 2.1%, to 1,148.67, ending a three-day losing streak. The index, a commonly used benchmark for professional investors, also climbed back above a key technical trading level today.

The Nasdaq composite index rose 54.14, or 2.3%, to 2,381.22. The technology-focused index has been the best performer during this month’s rally, jumping 12.6%.

About five stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.1 billion shares.

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