Dow Shoots Up; S&P, Naz Follow Suit
Updated from 12:57 p.m. EDT
Stocks in New York were riding higher Monday after a report on recent economic data suggested a sluggish, rather than a shrinking, U.S. economy.
The
Dow Jones Industrial Average
, which briefly stumbled out of the gate, recently leaped 146 points, or 1.1%, or 13,133. The
S&P 500
was up 15 points, or 1%, to 1440, and the
Nasdaq Composite
climbed 22 points, or 0.9%, at 2551.
"This is almost the flipside of Thursday and Friday, when there was negative economic news and the market still rallied," said Ryan Detrick, senior technical strategist with Schaeffer's Investment Research. "And now we're rallying on decent news. For this market, the path of least resistance is higher."
Buyers emerged in earnest after leading indicators, a collection of mostly previously released economic data from the Conference Board, ticked up 0.1% in April -- the same as the prior month, and a hair better than expected. Ian Shepherdson, chief U.S. economist with High Frequency Economics, said the consensus overshot because most economists made their forecasts before Friday's stronger-than-expected numbers on building permits.
"These data certainly reflect a weak economy but not one in recession," said the Conference Board.
Still, pointed out Art Hogan, chief market analyst with Jefferies, much of what buoyed the overall figure were gains in the stock market. "So it's a self-fulfilling prophecy, to a certain extent," he said. In addition to rising equities, said the Board, the interest rate spread and the housing permits worked to outweigh harsh slides in average weekly hours and consumer expectations.
Hogan noted that there are very few other catalysts to move things along today, though "we're still staring down the barrel of a very expensive price for crude
oil, and markets continue rallying in the face of that."
"Something's got to give pretty soon," he said, "and a lot of people think it might be crude."
Recently, oil futures were slipping 11 cents to $126.18 a barrel, and gold futures were up $5.80 at $905.70 an ounce. The U.S. dollar was erasing early losses, firming by 0.5% against the euro to $1.5504 while adding 0.4% against the yen to fetch 104.50.
On the corporate front,
Microsoft
(MSFT) - Get Report
, which earlier this month dropped its attempts to take out
Yahoo!
(YHOO)
, over the weekend presented the Internet-portal operator with a
that would not constitute an outright acquisition. The software giant added, however, that it "reserves the right to reconsider" another buyout offer.
The development comes amid billionaire investor Carl Icahn's looming threat to nominate 10 people to Yahoo!'s board. Icahn recently began amassing large amounts of Yahoo! shares, saying the company acted "irrationally" in turning down Microsoft's sweetened takeout bid earlier this month. Microsoft was down 0.4% in recent premarket trading, while Yahoo! was roughly flat.
Microsoft shares shed 1.1% as Yahoo! added 0.5%.
American Axle Manufacturing
(AXL) - Get Report
last Friday
with the United Autoworkers that would end a costly strike. American Axle is a key supplier to supplier to automaker
General Motors
(GM) - Get Report
, shares of which were up 2.9% to help prop up the Dow. American Axle shares lost 3.2%.
In earnings, home-improvement retailer
Lowe's
(LOW) - Get Report
said early Monday its
17.9% to $607 million, or 41 cents a share, a penny better than the average analyst estimate from Thomson Reuters. Same-store sales, or those from stores open a year or more, slid 8.4%, and the company also shaved down its full-year outlook. Shares were down 1%.
Elsewhere,
Campbell Soup's
(CPB) - Get Report
fiscal third-quarter earnings missed Street estimates by a penny a share, excluding a big gain from the sale of its Godiva business. Campbell's adjusted profit was down 7.8% to $165 million, or 43 cents a share. The stock was off 5.5%.
As for the day's analyst research, Citigroup upped chipmaker
Texas Instruments
(TXN) - Get Report
, after which shares lifted by 2.7%. At the same time,
National City
( NCC) climbed 5.7% after Citi upgraded the stock from hold to buy with a $7 price target. Citi said the bank's recent $7 billion capital raise gives it leeway to deal with its credit issues.
However, Citi also cut earnings estimates for three brokerage firms --
Goldman Sachs
(GS) - Get Report
,
Lehman Brothers
( LEH) and
Morgan Stanley
(MS) - Get Report
-- which Citi says may face more losses due to a difficult operating environment. Morgan Stanley shares were off 0.6%, though Goldman remained fractionally higher as Lehman ticked up 0.6%.
In more negative calls,
Continental Airlines
(CAL) - Get Report
lost 2.2% after JPMorgan cut the stock to underweight. Friedman Billings downgraded
American Eagle Outfitters
(AEO) - Get Report
to market perform while easing its price target on another clothing retailer,
Abercrombie
(ANF) - Get Report
. Shares slumped 2.8% and 1.4%, respectively.
But the overall equities environment was a welcoming one, so investors lately were pulling their money out of Treasury securities. The 10-year note was down 5/32 in price to yield 3.87%, and the 30-year bond fell 13/32 in price, yielding 4.60%.
Markets abroad were mostly rising. In Asia, Tokyo's Nikkei 225 added 0.4% overnight, and Hong Kong's Hang Seng Index was ahead by 0.5%. Among European bourses, the FTSE 100 in London tacked on 1.2%, and Germany's Xetra Dax was better by 1%. The Paris Cac bounced 1.3%.