Mon, August 02, 2010
Business > Markets

Wall Street rallies on earnings and manufacturing data

2010-08-02 15:15:28 GMT2010-08-02 23:15:28 (Beijing Time)

Stocks rallied on Monday as strong earnings results and better-than-expected manufacturing data prompted investors to build on last month's run-up.

Indexes jumped more than 1 percent across the board after closing out July with the best monthly gain in a year, bouncing back from a sell-off through May and June.

Energy shares led the S&P 500 higher as oil prices rose above $81 a barrel for the first time since early May on a bullish outlook for energy demand.

Strong results in Europe from big banks BNP Paribas SA (BNPP.PA) and HSBC Plc (HSBA.L)(HBC.N) set the positive tone early and buoyed U.S. bank stocks. Citigroup Inc (C.N) was up 2.2 percent at $4.19, and JPMorgan Chase & Co (JPM.N) added 1.7 percent to $40.97.

Indexes climbed to session highs after the Institute for Supply Management said the U.S. manufacturing sector grew in July for the 12th straight month, while the government reported construction spending unexpectedly rose in June.

"What we've seen over the last few weeks has been decent earnings, but economic data has been on the weak side. But today we had good earnings out of Europe, and we actually had strong economic data, and that is piling on to a decent start to the month," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.

The Dow Jones industrial average (.DJI) gained 171.28 points, or 1.64 percent, to 10,637.22. The Standard & Poor's 500 Index (.SPX) jumped 19.73 points, or 1.79 percent, to 1,121.33. The Nasdaq Composite Index (.IXIC) climbed 39.15 points, or 1.74 percent, to 2,293.85.

BP Plc (BP.L)(BP.N) also lifted the energy sector as the British oil major prepared to plug its blown-out Gulf of Mexico well for good. Its U.S.-listed shares rose 2 percent to $39.26, while the PHLX oilfield services index (.OSX) jumped 4 percent.

The S&P 500 regained its 200-day moving average of 1,114.51, a level that has provided resistance recently. A decisive break above that level would provide a bullish signal.


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