Manufacturing data gives market a boost
NEW YORK » Stocks lurched higher after a back-and-forth session yesterday as investors apparently set aside some interest rate concerns and took a dose of upbeat economic data at face value.
The Philadelphia Federal Reserve said regional manufacturing in June has had its strongest growth since April 2005. The bank's index of regional manufacturing activity jumped to 18 from 4.2 in May. But the report had little effect on the market although investors have been wary about any signs of economic strength that might lead the Federal Reserve to raise interest rates when its Open Market Committee meets next week.
Investors, looking for a reason to buy back into the market, briefly pushed away their rate concerns, even though the yield on the benchmark 10-year Treasury rose to 5.20 percent from 5.15 late Wednesday.
Oil, which had advanced amid concerns about a general strike in Nigeria, Africa's largest crude oil producer, reversed course yesterday. Light, sweet crude fell 21 cents to $68.65 per barrel on the New York Mercantile Exchange after nearing $70 early Thursday.
"Things on a fundamental basis haven't changed all that much. The market just gets excited one way or the other," said Tom Higgins, chief economist at Payden & Rygel Investment Management, referring to even slight shifts, for example, in bond yields. "Now that things have stabilized, although we're at a higher level the market can move higher for the year, but there's going to be higher volatility along the way."
The Dow Jones industrial average rose 56.42, or 0.42 percent, to 13,545.84 after dropping 146 points Wednesday.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 9.35, or 0.62 percent, to 1,522.19 and the Nasdaq composite index advanced 17.00, or 0.65 percent, to 2,616.96.
The Russell 2000 index of smaller companies rose 3.63, or 0.43 percent, to 839.81.
Advancing issues outpaced decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to 3.10 billion shares, down from 3.22 billion Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Recent weeks have proven relatively volatile on Wall Street after months-long periods of generally steady advances. Comments this month from Fed Chairman Ben Ber-nanke and inflation concerns furthered the notion that the central bank wasn't likely to cut interest rates this year as some observers had predicted and could possibly even raise rates.
Investor concerns sent the yield on the 10-year note above 5 percent this month for the first time since last summer.
Subsequent spikes in yields, which move inversely to bond prices, have at times rattled stock markets. Since then, as yields receded stocks have logged sharp -- if temporary -- gains, such as those from the final three days of last week when the Dow surged more than 344 points.
Also yesterday, the American Stock Exchange resumed trading of stocks and exchange traded funds in the afternoon after the exchange resolved technical problems that had forced it to halt trading earlier in the day.