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While you were sleeping: Stocks in US lead recovery

Tuesday 23rd March 2010

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Investor optimism returned in the US after the passage of a healthcare reform bill, which eased concerns about some corporate profits, putting the brakes on concerns in Europe.

In afternoon trading, the Dow Jones Industrial Average rose 0.53% and the Standard & Poor’s 500 gained  0.52%. The Nasdaq Composite was up 0.92%

Among the advancers were healthcare stocks as the passing of a bill to overhaul the US medical system eased uncertainty. Shares in Boeing and Oracle also increased.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ rose 0.06% to 16.98.

While recently there has been talk of a pending correction, Bloomberg News reported that there are signs that the rally in US stocks is just getting started.

Stephen Lieber of Alpine Woods Capital Investors LLC and David Darst of Morgan Stanley are buying on speculation the expansion will revive profit growth, they told Bloomberg.

“This is not a junk stock rally,” said Lieber, who helps manage more than US$7 billion in Purchase, New York. “This is a restoration-of-confidence rally. This is a business confidence rally.”

In Europe overnight, the Dow Jones Stoxx 600 declined 0.1% to 260.12, with bank shares leading the slide.

Among national benchmarks, the UK ’s FTSE 100 slid 0.1%. Germany ’s DAX 30 edged 0.07% higher and France ’s CAC 40 ended up 0.08%.

Some of the biggest movers included ICAP Plc and Allied Irish Banks Plc.

The Dollar Index, which measures the greenback against a basket of six major currencies, fell 0.16% to 80.63.

In early afternoon trade in New York, the euro was up 0.2% at US$1.3553 after briefly touching a session high at $1.3568. Earlier the currency hit a three-week low at US$1.3464.

The U.S. dollar remained rangebound versus the yen at 90.12, with support around 89.75 and resistance just over 91.00 yen. The Australian and New Zealand dollars slipped 0.1% and 0.5%, respectively, against their U.S. counterpart.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, fell 0.13% to 272.29.

Spot gold hit a low of US$1,092.25 an ounce and was bid at US$1,097.20 an ounce at 1503 GMT (11.03am EDT), against US$1,106.55 late in New York on Friday.

Among other precious metals, silver was bid at US$16.75 an ounce against US$16.93, platinum was at US$1,583 an ounce against US$1,604.50, while palladium was the biggest faller, slipping to $453 against US$467.

Copper for delivery in May rose 0.2% to US$3.3775 a pound in New York, reversing a 1.8% slide.

Crude oil erased losses and rose 0.5% to US$81.11 a barrel, following US equities higher

 

 

Businesswire.co.nz



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