Nasdaq hits 52-week high
NEW YORK » Stocks surged higher yesterday after new data soothed inflation concerns and the price of oil tumbled to its lowest level in five months. The advance carried the Nasdaq composite index to a new 52-week high.
Wall Street embraced a report that the manufacturing sector expanded at a slower pace in November. The report, from the Federal Reserve Bank of Philadelphia, showed that prices in the region's manufacturing sector were steady or falling.
Earlier, industrial output data cheered investors. Output from manufacturing, mines and utilities rose a healthy 0.9 percent last month as refineries and oil and natural gas platforms began production again after widespread shutdowns caused by hurricanes Katrina and Rita. The data quelled concerns that the hurricanes had done lasting damage to the economy.
"A lot of uncertainties have been removed," said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. Questions about the economic after effects of the hurricanes appear settled, as does their effects on corporate earnings and the issue of who will lead the Federal Reserve.
"The market did bottom in late October," Paris said. "We are having the fourth-quarter rally people are looking for. ... After going up three weeks in a row, going sideways would be good news."
Falling oil prices also boosted stocks. A barrel of light crude settled at $56.34, down $1.54 on the New York Mercantile Exchange and its lowest level since June 15.
According to preliminary calculations, the Nasdaq rose 32.53, or 1.49 percent, to 2,220.46, just surpassing its previous 52-week high, reached in July. The Standard & Poor's 500 index rose 11.59, or 0.94 percent, to 1,242.80.
The Dow Jones industrial average rose 45.46, or 0.43 percent, to 10,720.22. The Dow lagged the other major indicators after being held back by component Altria Group Inc., which fell on a Goldman Sachs downgrade.
There was some sense on Wall Street that the longed-for fourth-quarter rally had begun. Technology stocks have led previous rallies and anyone watching Google Inc.'s stock cross $400 a share yesterday could only hope this time would be no different.
"Traders remember that the big rally from last year was driven by the Nasdaq," Paris said. "They say, 'Let's gamble on it.'"