Markets rise on better economic news
NEW YORK – The stock market notched its second straight daily advance Thursday, with investors assuaged by a pullback in oil prices and some better-than-expected economic data.
Wall Street has been worried about cash-strapped consumers paring back their spending, so it was pleased that the energy markets gave up early gains that briefly drove crude oil above $125 a barrel.
In other positive signs, the Philadelphia Federal Reserve said regional manufacturing activity is contracting in May at a much slower pace than in April, while major companies including General Electric Co. and CBS Corp. were making deals.
“The encouraging news is that the markets have become more functional, and large companies are able to make strategic purchases and sales, which previously was a very difficult thing to do,” said Alan Gayle, senior investment strategist for RidgeWorth Capital Management. Still, he added, “the market is still trying to digest the severity of the slowdown.”
Fears of an ongoing credit market paralysis have eased significantly. Federal Reserve Chairman Ben Bernanke said in a speech in Chicago he is “encouraged” by recent efforts by banks to raise cash – a trend that is helping to relieve the credit crisis.
But, Gayle said, “what we’re left with now are cyclical credit strains. And those are likely to linger for a while.”
The Dow Jones industrial average rose 94.28, or 0.73 percent, to 12,992.66.
Broader stock indicators advanced more than 1 percent to their highest closing levels since Jan. 3. The Standard & Poor’s 500 index rose 14.91, or 1.06 percent, to 1,423.57, and the Nasdaq composite index rose 37.03, or 1.48 percent, to 2,533.73.
The technology-laden Nasdaq got a boost from Intel Corp., which rose $1.13, or 4.7 percent, to $24.97 after a Lehman Brothers analyst lifted his price target on the chip maker, citing strong product demand.
Overseas, Japan’s Nikkei stock average rose 0.94 percent. Britain’s FTSE 100 rose 0.58 percent, Germany’s DAX index fell 0.03 percent, and France’s CAC-40 rose 0.04 percent.