Broad Rally Boosts Stocks
Stocks resumed their new year’s rally on Monday, shaking off the profit taking that hit Friday in the wake of disappointing data on U.S. job creation in December.
In other trading, bond yields mostly held steady after sliding on Friday. The dollar gained.
On Wall Street, the Dow Jones industrial average edged up 26.29 points, or 0.3%, to 10,485.18. It had tumbled 133.55 points Friday after the government said the economy created a net 1,000 new jobs last month, far below expectations.
The data had cast doubt on the strength of the U.S. economic recovery.
Other key indexes also gained Monday. The technology-dominated Nasdaq composite continued to lead the market, rising 24.86 points, or 1.2%, to a 2 1/2-year high of 2,111.78. Nasdaq had lost 13 points Friday.
The broader Standard & Poor’s 500 index rallied 5.37 points, or 0.5%, to 1,127.23.
Rising stocks outnumbered losers by almost 2 to 1 on Nasdaq and by about 5 to 3 on the New York Stock Exchange.
On Wall Street, “The general theme of things is bullish,” said Bill Strazzullo, strategist at State Street Global Markets. “People are still in a buying mode and waiting to buy dips.”
Semiconductor shares helped lead the rally Monday. The SOX index of semiconductor stocks rose 3% to 560.65, a level unseen since April 2002.
Many investors remain excited about the potential for robust growth in technology companies’ earnings this year.
Blue-chip profit hopes also are high, but two Dow stocks -- Merck and Alcoa -- were hurt Monday by brokerage downgrades.
Merck fell $1.23 to $45.90. Credit Suisse First Boston cut its rating to “underperform” from “neutral,” citing growth concerns.
Prudential said it cut its rating on aluminum maker Alcoa to “underweight” from “neutral.” The shares fell $1.28 to $35.97, making it the biggest percentage loser on the Dow. Analysts said Alcoa’s fourth-quarter earnings, which were posted Thursday, were not as positive as they had first seemed.
In other highlights:
* Private mortgage insurer MGIC Investment said its quarterly earnings fell but were ahead of Wall Street estimates on lower-than-expected losses on claims on bad loans. Its shares surged $7.93, or 13%, to $66.59.
* The yield on the 10-year Treasury note ended at 4.09%, up from 4.08% Friday. The yield had tumbled from Thursday’s close of 4.25% after the employment data raised doubts that the Federal Reserve might tighten credit this year.
* The euro fell to $1.276 from $1.284 on Friday. European Central Bank President Jean-Claude Trichet said “brutal moves” in the currency are unwelcome. “The ECB is finally expressing some concern about the appreciation of the euro,” said David Durrant, currency strategist at Bank Julius Baer & Co.
* At the New York Mercantile Exchange, crude oil hit a 10-month high as concerns about low U.S. inventories offset profit taking as the Northeast thawed out from a freeze. Crude for February delivery closed up 41 cents at $34.72 a barrel, trading at the highest level since March 18.
Market Roundup, C8-9
