China data pulls up Dow and S&P 500
THE Dow and the Standard & Poor’s 500 index closed at 13-month highs last night as an upbeat forecast from a top homebuilder and data from China pointed to a strengthening global economy.
The Dow’s advance was its sixth straight as comments from top Federal Reserve officials suggesting low interest rates will stay for some time added to the positive tone.
Luxury homebuilder Toll Brothers late Tuesday forecast revenue that was sharply higher than expected, lifting the Dow Jones homebuilders index 7.1 per cent. Toll jumped 16.4 per cent to $21.41.
Data before the open showed Chinese factory output rose to a 19-month high in October. Investors bet the data heralded growing demand in the world’s third-largest economy.
“There was fairly bullish news coming from China with respect to its industrial production, which has exerted upward pressure on commodities and commodity-related stocks,” said Matt Kaufler, portfolio manager and equity analyst at Clover Capital Management.
After the closing bell, shares of network equipment maker 3Com rose 34 per cent to $7.64 after Hewlett-Packard said it agreed to buy 3Com for $2.7bn.
The Dow Jones industrial average was up 44.29 points, or 0.43 per cent, at 10,291.26. The Standard & Poor’s 500 Index was up 5.50 points, or 0.50 per cent, at 1,098.51.
The Nasdaq Composite Index was up 15.82 points, or 0.74 per cent, at 2,166.90.
The Hewlett-Packard announcement could give investors reason to extend the stock market’s gains.
The technology sector is “where the concentration of deal flow is, and it seems to me that might be supportive of the market at this juncture,” Rob Stein, managing partner of Astor Asset Management, said.
During the regular session, shares of Wal-Mart, up 1.3 per cent at $52.97, gave the biggest lift to the Dow, which recorded its longest winning streak since August.
The Dow has risen 57 per cent from its 12-year closing low hit on March 9.
Volume was light due to the Veterans Day holiday. Federal offices and the US bond market closed for the day.