Stocks open lower as commodities rally
Stocks rose for a fourth straight session Wednesday, led by industrial shares, as the Federal Reserve said the economy was stabilizing.
The Standard & Poor’s 500 index finished at an 11-month high. The Dow Jones industrial average rose 50 points to its second-highest close of the year.
The Dow had been up as much as 80 points before the release of the Fed’s “beige book” on regional economies and briefly surrendered that gain after it came out. The report suggested that the worst of the recession was over but also indicated that the economy had yet to show broad growth.
After rebounding late in the day, the Dow finished up 49.88 points, or 0.5%, to 9,547.22. The index has added 267 points, or 2.9%, in four days.
The broader S&P; 500 index gained 7.98 points, or 0.8%, to 1,033.37, while the Nasdaq composite index rose 22.62 points, or 1.1%, to 2,060.39.
The Russell 2,000 index of smaller companies jumped 1.7%.
Advancing stocks outpaced those that fell by about 5 to 2 on the New York Stock Exchange.
Industrial shares were the biggest gainers as investors bet that higher commodity prices would translate into increased profits if the economy strengthened.
Shares of construction and mining equipment maker Caterpillar jumped 3.1%, Boeing gained 2.1% and General Electric rose 2.6%. Aircraft maker Textron added 2.4% after the company said it would leave its 2009 profit forecast unchanged.
In the commodity markets, oil futures rose 21 cents to settle at $71.31 a barrel on the New York Mercantile Exchange. Gold fell but still hovered less than $5 below $1,000 an ounce after trading above that mark Tuesday for the first time since February.
Yields on government bonds rose. The benchmark 10-year Treasury note climbed to 3.48% from 3.46% late Tuesday. The dollar weakened, with an index of its value against other major currencies falling for a fourth consecutive trading day.
In other market highlights:
* McDonald’s dropped 2% after reporting that sales at established restaurants grew the smallest amount since February at the world’s largest fast-food chain.
* Capital One Financial surged 5.7%. A Citigroup analyst upgraded the credit card issuer, predicting a decline in its credit losses.
* Barrick Gold sank 6%. The world’s biggest gold producer said it would increase a stock offering that it announced Tuesday by $500 million to $3.5 billion.
* Overseas, key stock indexes rose 1.2% in Britain, 1.7% in Germany and 1.3% in France. Shares in Japan fell 0.8%.
