MARKET SNAPSHOT: U.S. Stocks Extend Financial-led Rally
U.S. stocks rallied Tuesday, extending gains into a second day, after a
measure of manufacturing activity proved brighter than expected, and separate
offerings of fresh equity from Wall Street's
"It looks like a financial-led rally, some of it based on Lehman raising
capital; the thought being, if you can raise the capital and take care of
things, it takes off the table the collapse worries," said
And, early economic data fostered the sentiment of "Hey, we're not falling through the floor on economic data," said Stone, who added, "you'll probably continue to see weak economic data, but that doesn't necessarily doom you to poor stock market returns."
Rallying more than 100 points early on, the Dow Jones Industrial Average (DJI) added to its gains in the wake of U.S. economic data that showed the Institute for Supply Management's index inching up to 48.6% in March from 48.3% in February.
The reading topped the forecasts of analysts polled by MarketWatch, who had expected the index to slip to 47.0%. .
"Healthy demand abroad has boosted exports of manufactured goods, offsetting
some of the strain from weak domestic demand," said
Separately, the Commerce Department reported U.S. construction spending fell 0.3% in February, less than the 1% drop predicted by economists.
The Dow industrials were recently up 282.37 points to 12,545.26, with all 30
components posting gains. Shares of
The S&P 500 (SPX) added 30.92 points to 1,353.62, while the Nasdaq Composite ( RIXF) advanced 55.90 points to 2,335.00.
Volume on the New York Stock Exchange neared 1.9 billion shares, with five stocks gaining for every issue on the decline. On the Nasdaq, 832 million shares were exchanged, and advancers topped decliners nearly 2 to 1.
On the New York Mercantile Exchange, crude-oil futures reversed earlier
losses, recently up
Gains in the dollar helped undercut commodities prices. The dollar index, which measures the greenback against a basket of currencies, was at 72.49, up from 71.749 late Monday.
A big positive behind the impressive gains on Wall Street is the favorable
reception to Lehman's offering. "It's three times oversubscribed; people are
interested in investing in Lehman," said
Shares of Lehman (LEH) added 12% after the company announced plans to offer
UBS (UBS) shares gained 11.5% after the company disclosed
"It's not just a U.S. problem, it's the European banks' turn to say, 'Yeah, we had a little exposure there too,'" said Hogan, who also pointed to an index showing confidence among Japanese manufacturers at a four-year low as putting U.S. economic woes in perspective.
Later Tuesday, U.S. automakers are due to report their monthly sales figures, with Edmunds.com seeing a 13% drop in March sales. Chrysler, owned by Cerberus Capital Management and Daimler, is expected to post the worst figures of the Big Three.
Overseas, European shares started off the second quarter strongly, largely on gains from financials including UBS. .
U.S. stocks on Monday finished the worst quarter in nearly five years with a solid advance.
(END) Dow Jones Newswires