Grumpy
05-06-2009, 06:40 PM
http://online.wsj.com/article/SB124164884516593371.html
By ROB CURRAN
Stocks rose and the major indexes approached their highest levels of the year as traders bet on Bank of America and Wells Fargo ahead of their "stress-test" grades Thursday.
Other stocks, such as Walt Disney, benefited from a sense that the economic gloom is lifting. In the latest data to back up that case, Automatic Data Processing and Macroeconomic Advisers said the U.S. private sector shed 491,000 jobs during April, better than the 650,000-job decline that economists had expected the report to show.
"We also have a host of market-based leading indicators all lined up," said Michael Darda, an economist at MKM Partners, who switched to the bullish camp in February. "There's a steep yield curve, narrowing credit-market spreads and rising commodity prices. You have these things basically coalescing and ... you've got triple-digit [percentage] monetary growth really unprecedented. So I think it would be unusual not to see some kind of economic growth" by year's end.
Bank of America rose $1.85, or 17%, to $12.69 on reports that regulators told the banking giant it has a capital shortfall of about $35 billion, roughly half the amount some on Wall Street had feared. Other banks subject to the stress test also were on the rise: Regions Financial added 34 cents, or 6.2%, to 5.83; and Wells Fargo rose 3.62, or 16%, to 26.84.
Overall, the Dow Jones Industrial Average rose 101.63, or 1.21%, to 8512.28, its highest close since early January. The broad Standard & Poor's 500 index rose 15.73, or 1.74%, to 919.53, within 15 points of its highest close of the year. The technology-oriented Nasdaq Composite rose 4.98, or 0.28%, to 1759.10.
Walt Disney rose 2.72, or 12%, to 25.87. Disney President and Chief Executive Robert Iger said the company was seeing signs that the economic situation has begun to stabilize.
Those sentiments were echoed by another executive with a good view of entertainment and media: Class B shares of News Corp. rose 63 cents, or 6.3%, to 10.65. After the bell, Rupert Murdoch, the head of the media conglomerate, owner of The Wall Street Journal, said "the worst is over" as News Corp. reiterated its outlook for the fiscal year.
Cisco Systems shed two cents to 19.61, but gained after the bell when it reported a fiscal third-quarter profit that topped Wall Street's expectations.
Pitney Bowes fell 2.79, or 11%, to 23.20 as revenue declined for the provider of stationery and mail services.
General Motors fell 19 cents, or 10%, to 1.66, the biggest drag on the Dow. As union negotiations and a government-backed restructuring looms, investors fear dilution of their stakes in the auto maker.
Pulte Homes shed 99 cents, or 8.1%, to 11.31 as Fox-Pitt Kelton warned that a merger with Centex could expose the home builder to more accounting impairments on property in a tough market. Energy stocks were strong as economic-recovery hopes buoyed oil prices.
XTO Energy rose 4.06, or 11%, to 41.97. First-quarter earnings rose 4.5%, and the natural-gas and oil driller boosted its 2009 production goal.
Write to Rob Curran at robert.curran@dowjones.com
By ROB CURRAN
Stocks rose and the major indexes approached their highest levels of the year as traders bet on Bank of America and Wells Fargo ahead of their "stress-test" grades Thursday.
Other stocks, such as Walt Disney, benefited from a sense that the economic gloom is lifting. In the latest data to back up that case, Automatic Data Processing and Macroeconomic Advisers said the U.S. private sector shed 491,000 jobs during April, better than the 650,000-job decline that economists had expected the report to show.
"We also have a host of market-based leading indicators all lined up," said Michael Darda, an economist at MKM Partners, who switched to the bullish camp in February. "There's a steep yield curve, narrowing credit-market spreads and rising commodity prices. You have these things basically coalescing and ... you've got triple-digit [percentage] monetary growth really unprecedented. So I think it would be unusual not to see some kind of economic growth" by year's end.
Bank of America rose $1.85, or 17%, to $12.69 on reports that regulators told the banking giant it has a capital shortfall of about $35 billion, roughly half the amount some on Wall Street had feared. Other banks subject to the stress test also were on the rise: Regions Financial added 34 cents, or 6.2%, to 5.83; and Wells Fargo rose 3.62, or 16%, to 26.84.
Overall, the Dow Jones Industrial Average rose 101.63, or 1.21%, to 8512.28, its highest close since early January. The broad Standard & Poor's 500 index rose 15.73, or 1.74%, to 919.53, within 15 points of its highest close of the year. The technology-oriented Nasdaq Composite rose 4.98, or 0.28%, to 1759.10.
Walt Disney rose 2.72, or 12%, to 25.87. Disney President and Chief Executive Robert Iger said the company was seeing signs that the economic situation has begun to stabilize.
Those sentiments were echoed by another executive with a good view of entertainment and media: Class B shares of News Corp. rose 63 cents, or 6.3%, to 10.65. After the bell, Rupert Murdoch, the head of the media conglomerate, owner of The Wall Street Journal, said "the worst is over" as News Corp. reiterated its outlook for the fiscal year.
Cisco Systems shed two cents to 19.61, but gained after the bell when it reported a fiscal third-quarter profit that topped Wall Street's expectations.
Pitney Bowes fell 2.79, or 11%, to 23.20 as revenue declined for the provider of stationery and mail services.
General Motors fell 19 cents, or 10%, to 1.66, the biggest drag on the Dow. As union negotiations and a government-backed restructuring looms, investors fear dilution of their stakes in the auto maker.
Pulte Homes shed 99 cents, or 8.1%, to 11.31 as Fox-Pitt Kelton warned that a merger with Centex could expose the home builder to more accounting impairments on property in a tough market. Energy stocks were strong as economic-recovery hopes buoyed oil prices.
XTO Energy rose 4.06, or 11%, to 41.97. First-quarter earnings rose 4.5%, and the natural-gas and oil driller boosted its 2009 production goal.
Write to Rob Curran at robert.curran@dowjones.com