EW - Dax: Wie lange dauert die aktuelle Topbildung
Manufactured gains
A strong reading on manufacturing in New York revives recovery hopes and lifts stock prices.
June 16, 2003: 10:14 AM EDT
NEW YORK (CNN/Money) - A surprisingly strong survey of manufacturing activity in the state of New York gave investors confirmation that their bets on a second-half economic recovery could prove true and drove stock prices higher Monday morning.
New York Empire State Index, a regional take on manufacturing, came in at a surprising 26.8 for June, more than three times what economists expected and more than double May's reading of 10.6.
The news gave the Dow Jones industrial average (up 61.57 to 9178.69, Charts), the Nasdaq composite (up 12.11 to 1638.60, Charts) and the S&P 500 index (up 7.67 to 996.28, Charts) gains of about 0.5 percent each.
Stocks have rallied over the past three months on the belief that the economy is bound to bounce back in the second half of the year. Most economic reports, however, have indicated that growth remains tepid and the labor market is still contracting. But Wall Streeters have stubbornly ignored the data, finding silver linings in every bit of bad news that has come the market's way and turning whatever good news there has been into hefty gains for stocks.
A few upbeat pieces of corporate news also supported the market's early climb.
Yahoo! (YHOO: up $1.26 to $29.98, Research, Estimates) jumped nearly 4 percent after Soundview Technologies upgraded the company to "outperform" from "neutral."
Pouring a bit of cold water on the tech stock rally, Lehman Brothers downgraded the sector to "neutral" from "overweight," saying earnings revisions have run well ahead of those for the rest of the market.
But that didn't stop J.D. Edwards (JDEC: up $0.55 to $13.58, Research, Estimates)' stock from climbing more than 3 percent after PeopleSoft (PSFT: down $0.21 to $16.71, Research, Estimates) reaffirmed its commitment to a merger with the company. About a week after PeopleSoft had announced the J.D. Edwards deal, Oracle (ORCL: up $0.01 to $13.49, Research, Estimates) made an unwelcome $5.1 billion offer to buy PeopleSoft, a deal which, if it is completed, will likely derail the J.D. Edwards acquisition.
Elsewhere in the market, Pfizer (PFE: up $0.78 to $33.86, Research, Estimates) gained 2 percent after the company said its cholesterol lowering drug, Lipitor, significantly reduced strokes and heart attacks in patients with type II diabetes, which prompted the company to halt its trials early.
Market breadth was positive and trading volume was relatively light. On the New York Stock Exchange advancing issues outnumbered decliners by seven to three as 137 million shares changed hands. On the Nasdaq, where volume stood at 274 million shares, gainers held a six-to-four lead over losers.
Bond yields continued to decline, with the 10-year Treasury note now yielding 3.09 percent as its price climbed 7/32 of a point. The dollar was slightly higher against the yen and little changed against the euro.
European stock markets were mostly higher late in the day there, while Asian stocks finished their overnight session mixed.
Brent crude oil futures gained 21 cents to $26.60 a barrel in London and gold climbed $2.90 to $360.10 an ounce in New York.
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