U.S. Stocks Rally


U.S. stocks gained for a second day on speculation a government report showing the highest unemployment rate since 1992 will force Congress to pass an economic stimulus package.

Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. rallied at least 7 percent to lead gains in the Dow Jones Industrial Average. All 10 industry groups in the Standard & Poor’s 500 Index advanced after the Labor Department said the nation lost 598,000 jobs last month and the unemployment rate climbed to 7.6 percent.

The S&P 500 rose 2.9 percent to 869.62 at 1:36 p.m. in New York. The Dow Jones Industrial Average added 228.43 points, or 2.8 percent.  The S&P 500 has gained 4.5 percent over the past five days, snapping a month-long stretch of weekly declines. The benchmark index for U.S. equities has climbed 14 percent from an 11-year low reached on Nov. 20 amid speculation the stimulus legislation will spur growth. It is still down 4 percent on the year.

European stocks gained for a second week, erasing this year’s loss, as companies from Vodafone Group Plc to Electrolux AB reported better-than-estimated results and governments stepped up measures to revive the global economy.

Vodafone, the largest mobile-phone company, rose 6.7 percent this week after sales beat analysts’ projections. Electrolux, the second-biggest appliance maker, climbed 16 percent on a smaller- than-expected loss. Infineon Technologies AG increased 17 percent as Europe’s second-largest maker of semiconductors said it would deepen cost cuts and lower investments to preserve cash. Xstrata Plc led mining shares higher as metals prices rallied.

The Dow Jones Stoxx 600 Index added 3.8 percent to 198.53, for a 0.1 percent gain in 2009. The measure has climbed 8.8 percent in the past two weeks amid speculation companies will weather the crisis that drove the U.S., Europe and Japan into simultaneous recessions and government measures and interest-rate cuts will revive the economy.

National benchmark indexes increased in 15 of the 18 western European markets. Germany’s DAX Index rose 7.1 percent, while France’s CAC 40 advanced 5 percent. The U.K.’s FTSE 100 added 3.4 percent as Aviva Plc and BHP Billiton Ltd. rallied.

Asian stocks rose, led by banks and technology companies, on optimism government measures worldwide will ease the financial crisis and stem the deterioration in the global economy.

Westpac Banking Corp., Australia’s largest bank by market value, gained 3 percent after the central bank slashed its inflation forecast, raising speculation it may cut interest rates. Mizuho Financial Group Inc., Japan’s second-largest bank, gained 2.3 percent as a U.S. Treasury official said details of a financial-recovery plan will be announced in three days. Lenovo Group Ltd., the world’s fourth-largest personal-computer maker, surged 11 percent in Hong Kong after a management reshuffle.

The MSCI Asia Pacific Index rose 1.1 percent to 83.48 at 8:02 p.m. in Tokyo, with three stocks rising for each that fell. The gauge has dropped 6.8 percent in 2009, extending last year’s record 43 percent tumble, as the credit crisis dragged the world’s biggest economies into recession.

The measure added 0.4 percent this week, as lower forecasts from companies including Mizuho offset new stimulus efforts from Japan, Australia and China. Toyota Motor Corp., the world’s largest automaker, today widened its loss prediction on slowing demand in the U.S. and in Japan. Its shares pared gains.

All markets rose today. The Nikkei 225 Stock Average added 1.6 percent. The Shanghai Composite Index climbed 4 percent.


TradingEconomics.com, Bloomberg
2/6/2009 10:57:58 AM