Dow Surges Nearly 3% in Relief Rally

In U.S. economic news, a decrease in new home sales for the third month in a row disappointed economists. New-home sales fell by 0.7% in June compared to a forecasted 0.6% decline. The housing industry is expected to remain a drag on the economy.

Global manufacturing data helped to lift oil prices. The October crude oil contract gained $1.02 to settle at $85.44 a barrel. Gold was declining after hitting a record high of $1,917.60 an ounce as the equities rally gained momentum. The December delivery contract lost $30 to $1,858 an ounce.

Deven Sharma, president of McGraw-Hill (MHP) subsidiary Standard & Poor's, will leave the company and be replaced by Douglas Peterson. Peterson, who will join the company Sept. 12, is currently chief operating officer of Citibank N.A., the chief banking unit of Citigroup (C).

Sharma's resignation follows the rating agency's much-criticized decision to downgrade the U.S. credit rating to AA+ from AAA. McGraw-Hill's stock moved up 4.5% to 38.69.

Delta (DAL) plans to order 100 Boeing (BA) 737 single-aisle jets in a deal valued at more than $8 billion, according to a Wall Street Journal report. Boeing's stock gained 4% to $60.77.

H.J. Heinz (HNZ) reported better-than-expected first-quarter adjusted earnings on growth across emerging markets. The company expects second-quarter earnings to meet or come in slightly above its year-ago profit, but lowered its fiscal 2012 adjusted earnings guidance. The stock lost 1.2% to $51.44.

Shares of UBS (UBS) climbed 5.2% to $13.88 following news that the Swiss bank plans to cut 3,500 jobs in an effort to eliminate expenses of 2 billion Swiss francs ($2.54 billion) a year by the end of 2013.

The benchmark 10-year Treasury was down 2/32, lifting the yield to 2.118%. The dollar weakened against a basket of currencies, with the dollar index down by 0.4%.

-- Written by Chao Deng in New York.

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