Wall Street extended its November rally into a new week today, betting that an upcoming series of economic reports will show strength in the overall economy with inflation contained.
Comments from Federal Reserve Bank of Dallas President Richard Fisher put investors at ease about upcoming economic and retail sales reports. He said the economy continues to grow strongly, and he did not indicate that inflation was presenting a problem.
Stocks have risen six out of the past seven weeks as oil prices continued to tumble, helping lift sectors that typically are large energy consumers. Lower energy prices are also viewed as a boost for consumers, especially heading into the holiday shopping period.
“There is a tremendous amount of momentum built into the market,” said Steven Goldman, chief market strategist for Weeden & Co. “We’ve had a good run, we’ve consolidated, and we need this acceleration going into the holidays.”
He pointed out that technology stocks continue to drive the market higher, with both Intel Corp. and Dell Inc. pushing the Nasdaq near to a six-year high. Merck & Co. helped lead the Dow Jones industrials after it said one of its painkillers did not result in increased risk of heart attacks.
On Wall Street, the Dow Jones industrial average rose 23.45, or 0.19%, to 12,131.88.
Broader stock indicators also gained. The Standard & Poor’s 500 index was up 3.52, or 0.25%, at 1,384.42, and the Nasdaq composite index rose 16.66, or 0.70%, at 2,406.38.
Fisher’s speech in San Antonio had little impact on the bond market, which, like Wall Street, is still awaiting tomorrow’s release of the Labour Department’s Producer Price Index and the Commerce Department’s retail sales data; both reports will measure the economy during October. Bonds were weaker, with the yield on the benchmark 10-year Treasury note rising to 4.61% from 4.59% late Friday.
Oil prices declined, with a barrel of light sweet crude down 1.01 dollar at 58.58 dollars on the New York Mercantile Exchange. The dollar was mixed against other major currencies, while gold prices fell.
“We got an awful lot of data, an extremely busy calendar,” said Stephen Massocca, president of Pacific Growth Equities. “The drop in oil has helped the market quite a bit, positive comments from the Dallas Fed, and an upgrade of the semiconductor group. There really hasn’t been anything on the bear side at all.”
The only negative piece of data released today came after the Treasury Department said the federal government started out its new budget year in October with a slightly higher deficit than last year. Revenues and spending both set records.
Intel led both the Nasdaq and Dow Jones industrials, rising 42 cents, or 2%, to 21.00 dollars. The world’s largest maker of chips for computers benefited after Citigroup upgraded the entire semiconductor sector.
Dell, which reports earnings this week, rose 60 cents, or 2.4%, to 25.49 dollars after being upgraded by Deutsche Bank. The bank told clients it expects the company’s shares to hit 28 dollars within the next 12 months.
Tyson Foods Inc. spiked 58 cents, or 4%, to 14.93 dollars after saying it expects to return to profitability this fiscal year. The company had reported a fourth-quarter loss due to one-time charges and losses in the chicken and beef sectors.
Merck up 34 cents to 43.46 dollars after saying its new arthritis painkiller is safer than Vioxx. Rival Novartis AG shed 1.06 cents to 58.30 dollars after the Swiss company disclosed in a filing with the Securities and Exchange Commission delays with its Galvus drug.
A memo leaked to The Wall Street Journal stated that Toyota hopes to gain a 15% market share by targeting Russia, India, China and Brazil. However, the stock gave up 94 cents to 120.88 dollars. General Motors Corp. rose 42 cents to 35.09 dollars.
Gannett Co. picked up 62 cents to 59.78 dollars on reports the media company is interested in acquiring rival Tribune Co., whose shares rose 43 cents to 32.46 dollars.
The Russell 2000 index of smaller companies was up 3.26, or 0.42%, to 772.41.