Stocks Soar on P&G Gains, Key Indicators
NEW YORK – Stocks started May with a broad rally fueled by some key economic data and upbeat earnings news from consumer products giant Procter & Gamble. The Dow Jones Industrial average to closed at a ten-week high.
The Dow closed up 163.37 points, or 1.52 percent, to 10,898.38, the highest close since Feb. 13, while the Nasdaq Composite Index added 52.14 points, or 2.46 percent, to 2,168.38.
The benchmark Standard & Poor's 500 index rose 17.00 points, or 1.36 percent, to 1,266.46.
Traders were focused on a few earnings reports from ''Old Economy'' and ``New Economy'' sectors alike, including consumer products giant Procter & Gamble and wireless telecommunications company Nextel Communications.
P&G, a member of the Dow's 30 stocks, jumped $4.13 gain, or 6.9 percent, to $64.18, a rise that accounted for nearly 17 percent of the Dow's rise.
``Procter & Gamble is a bellwether, blue-chip name and as this quarter was a little better than expectations, it appears the worst is probably over'' for many related companies, said Allen Ashcroft, who helps manage $4.4 billion for Allied Investment Advisors.
Aerospace giant Boeing Co. also supported the Dow with a gain of $1.63 to $63.43, along with tobacco giant Philip Morris, which was up $1.99 at $52.10.
Stocks ticked briefly lower after the National Association of Purchasing Management's closely watched manufacturing sector gauge ticked up to 43.2 in April, well below Wall Street expectations for a reading of 43.8, following March's 43.1 reading.
``I think it adds another piece of evidence that the economy is bottoming,'' Richard Cripps, chief market strategist at Legg Mason Wood Walker. ``But it takes a little away from those expecting a 50 basis-point Fed reduction at the next meeting."
Ashcroft was still wary of tech shares, though. ``We're looking at tech and thinking we're not out of the woods yet because of inventory problems, lower capital spending, etc.''
Dow Chemical gained 45 cents at $33.90 after announcing plans to cut 4,500 jobs, or 8 percent of its work force. The cuts double its earlier job reduction estimate as it looks to bolster savings from its purchase of Union Carbide.
Technology stocks were more mixed as investors took profits. Intel fell 44 cents to $30.47, but Microsoft rose $1.69 to $69.44.
The tech-dominated Nasdaq has risen more than 28 percent from its closing low for the year, 1,638.80, reached less than a month ago on April 4, and investors appeared to be locking in some of their profits.On Monday, the Nasdaq wrapped up its fifth best monthly performance ever.
Wireless telecommunications company Nextel Communications, the biggest independent U.S. mobile phone operator, posted a smaller loss and cut 5 percent of its work force. Nextel rose $2.47 to $18.72.
U.S. March construction spending rose 1.3 percent to a record $854.4 billion annual rate, following February's revised 0.9 percent gain. March's figure well exceeded economists' consensus forecasts for a 0.3 percent gain.
Advancing issues led decliners 8 to 7 on the New York Stock Exchange. Volume came to 858.14 million shares, compared with 935.39 million at the same point Monday.
The Russell 2000 index was up 3.08 at 488.40.
Overseas, Japan's Nikkei stock average rose 3.5 percent. Germany's DAX index was up 1.5 percent, Britain's FT-SE 100 was down 0.7 percent, and France's CAC-40 was up 1.2 percent.