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Sunday, April 5, 2009

US stocks climb, Dow closes above 8000 level

US stocks shrugged off a dismal March jobs report to end higher Friday, capping their fourth weekly gain amid market expectations that the economic contraction is easing.
The Dow Jones Industrial Average rose 39.51 points (0.50 per cent) at 8,017.59, closing above the psychological 8,000 level for the first time since February 9.
The tech-heavy Nasdaq composite climbed 19.24 points (1.20 per cent) to 1,621.87 and the broad-market Standard & Poor’s 500 index was up 8.12 points (0.97 per cent) to 842.50.
The S & P index had advanced 3.2 per cent this week.
The market opened mostly lower Friday after the Labor Department reported the US unemployment rate in March leapt to a new 25-year high of 8.5 per cent as recession-battered employers shed another 663,000 jobs.
The report was roughly in line with expectations of 658,000 job losses and an unemployment rate of 8.5 per cent.
Stocks wobbled after a private research firm reported deepening declines in the massive US services sector.
The Institute for Supply Management said its non-manufacturing index stood at a seasonally adjusted 40.8 per cent in March, 0.8 per centage point lower than the 41.6 per cent registered in February. It was the sixth consecutive monthly contraction in the sector that dominates the world’s biggest economy.
Despite the weak data, however, the bulls overcame the bears in late trading, buoyed by Federal Reserve Chairman Ben Bernanke’s assurances that government programs to unfreeze credit markets were working, said Wachovia Securities chief market strategist Al Goldman.
Based on latest data covering key sectors such as manufacturing, there is rising investor confidence that the end of the recession is finally coming into sight, said Frederic Dickson, chief market strategist of DA Davidson & Co.
‘We are holding to our view that the rate of decline in the economy is beginning to slow leading us to believe the economy has a good chance of bottoming out this summer,’ he said.
The US economy plunged into recession in December 2007, with growth contracting to 6.3 per cent in the last quarter.
Technology stocks set the stage for Friday’s rally with an impressive earnings report from Canadian tech titan Research In Motion. The BlackBerry maker’s stock jumped 20.75 per cent to 59.25 dollars.
US aerospace giant Northrop Grumman lost 3.68 per cent to 3.98 dollars after it agreed to pay 325 million dollars to settle a suit filed over defective parts for spy satellites.
Top drugmaker Pfizer dropped 1.60 per cent to 13.55 dollars amid reports US antitrust regulators wanted to give a closer review of its proposed 63 billion dollar purchase of rival Wyeth, down 0.21 per cent to 42.74 dollars.
Internet search giant Google rose 1.99 per cent to 369.71 dollars following a report that it was seeking to purchase the hot micro-blogging service Twitter.
General Motors rose 0.48 per cent to 2.10 dollars as reports speculated it may go for structured bankruptcy following a 60-day deadline issued by the authorities this week.
Bonds fell sharply. The yield on the 10-year US Treasury bond rose to 2.907 per cent from 2.752 per cent Thursday and that on the 30-year bond climbed to 3.721 per cent from 3.577 per cent. Bond yields and prices move in opposite directions.

The New Age



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