Translate This Page

Wednesday, June 15, 2011

US Stocks post best gains since April (ext)

NEW YORK (CNNMoney) -- U.S. stocks rallied Tuesday, with all three major indexes ending up more than 1%, following better-than-expected data on retail sales and inflation and Bernanke's call to Congress on the debt ceiling.

The Dow Jones industrial average (INDU) jumped 123 points, or 1%, with 80% of the blue-chip index's 30 components moving higher.

The S&P 500 (SPX) rose 16 points, or 1.3%, The Nasdaq Composite (COMP) gained 39 points, or 1.5%. All three major indexes posted their best performance since April 20.

Bernanke said the United States would be forced to stop payments on some existing obligations, possibly including Social Security and Medicaid, if the debt ceiling is not raised.

Investors liked what they heard, with stocks holding onto their gains. Stocks rallied right from the get-go Tuesday, following a round of better-than-expected economic data.

Plus, the market has really taken a hit the last several weeks, dropping nearly 6% since the beginning of May. Matt King, chief investment officer at Bell Investment Advisors, said it's not surprising to see a rebound since "the market has gotten pretty oversold."

But will the rally last? Stocks had a strong one-day bounce last Thursday, too, after a six-session losing streak, but fell back into sell mode the next day.

The Commerce Department said retail sales slid 0.2% in May. While it was the first decline in 11 months, it was much less of a drop than economists had forecast.

The Labor Department issued a brighter report on the producer price index, also known as manufacturer inflation. The PPI rose 0.2% in May, slightly better than the 0.1% that economists had forecast.

The dollar fell against the euro, but gained versus the British and the Japanese yen.

Oil for July delivery gained $2.07 to settle at $99.37 a barrel.

Gold futures for August delivery rose $8.80 to settle $1,1524.40 an ounce.

No comments: