U.S. Stocks Advance

U.S. stocks gained, snapping a three-day drop, as earnings topped estimates at Merck & Co. and Schering-Plough Corp. and Treasury Secretary Timothy Geithner said the government will step up efforts to fight the recession.
TradingEconomics.com, Bloomberg 2/3/2009 1:47:43 PM

Merck climbed 6.4 percent after savings from job cuts boosted profit, while Schering-Plough added 8.2 percent on earnings helped by cost reductions and added sales from an acquisition. A gauge of homebuilders jumped 8.6 percent after D.R. Horton Inc. reported its smallest loss in five quarters and pending home sales increased for the first time since August.

The Standard & Poor’s 500 Index climbed 1.6 percent to 838.51. The Dow Jones Industrial Average added 141.53 points, or 1.8 percent, to 8,078.36. The Russell 2000 Index increased 0.7 percent.

Benchmark indexes rallied to their highs of the day after Geithner told the Wall Street Journal that White House fiscal policy is about to get very aggressive” as President Barack Obama’s economic team prepares to address the deepening recession.

U.S. stocks declined for a third day yesterday after consumer spending slumped for a sixth straight month and companies from Mattel Inc. to Rockwell Automation Inc. posted lower-than-estimated profit. The S&P 500 has retraced more than half of its 24 percent rebound from an 11-year low in November.