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Stocks Jump 2 Percent as Industrials, Techs Soar

Tuesday, 15 Jun 2010 04:14 PM

 

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Industrial and technology stocks pulled the market sharply higher Tuesday after Boeing Co. said it was boosting production and an industry group forecast that demand for computers would increase.

The Dow Jones industrial average rose 213 points to their highest close since May 19. Major stock indexes rose more than 2 percent.

The advance was broad, but came on light trading volume. That's a sign that few traders are driving the market. Many are waiting to see whether the market will keep moving higher after weeks of erratic trading.

Industrials made some of the biggest moves following upbeat news from Boeing Co. and Illinois Tool Works Inc. Boeing rose 4 percent after increasing production of the 737 jet. Boeing said customers are adding to existing orders and placing new ones. ITW rose about 2.5 percent after it raised the lower end of its fiscal second-quarter earnings target.

More good news on industrials came from the New York Federal Reserve, which said regional manufacturing expanded for an 11th straight month in June.

"We're still seeing factories and manufacturing help provide a little stimulus for the economy here," said Michael Church, president at Addison Capital Group in Philadelphia.

Technology stocks got a boost after research firm International Data Corporation said it expects the personal computer market will grow 20 percent this year. Microsoft Corp. rose 4.3 percent.

A gain in the euro and a drop in the dollar signaled that traders are less worried that debt problems in Europe will disrupt a global recovery. The euro rose to $1.2339.

Concerns that weaker European countries like Greece would default on debt pounded stocks and the euro for much of May and in recent weeks. Traders have started to put aside some of their worries about Europe although the market is still susceptible to troubling headlines. On Monday, stocks gave up steep gains, partly because Moody's cut its rating on Greece's debt to "junk" status.

Still, investors are wary, and will punish stocks of companies that have disappointing news. Best Buy Co. fell 6 percent after the electronics chain posted weaker-than-expected earnings.

According to preliminary calculations, the Dow rose 213.88, or 2.1 percent, to 10,404.77. The broader Standard & Poor's 500 index rose 25.60, or 2.4 percent, to 1,115.23,

The Standard & Poor's 500 index moved above its average close of the past 200 days, 1,108. The 200-day moving average is a technical level watched by many traders. Pushing above that is seen as a sign of strength in the market. Gains in stocks faded Monday in part after the S&P 500 index failed to top the mark.

The tech-dominated Nasdaq composite index rose 61.92, or 2.8 percent, to 2,305.88.

Bond prices fell and drove up interest rates after stocks climbed. The yield on the benchmark 10-year Treasury note rose to 3.31 percent from 3.26 percent late Monday.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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