St. Patrick's Day Rally Sees Stocks Go Green

Tech led the way, although financials got in on the action as well, leading the major indices to their fifth up day in six sessions.
Author:
Publish date:

Updated from 4:08 p.m. EDT

Stocks in New York hung onto their slice of green on St. Patrick's day, with tech leading the charge.

The day brought surprisingly positive housing data, but also daunting outlooks from some key industrial stocks.

Led by a 7.7% rise in

Citigroup

(C) - Get Report

and a 6.7% rise in

Home Depot

(HD) - Get Report

, the

Dow Jones Industrial Average

rose 178.73, or 2.5%, to 7395.70. The

S&P 500

added 24.23 points, or 3.2%, to 778.12. The

Nasdaq

fared the best, adding 58.09 points, or 4.1%, to 1462.11.

Chipmakers were on the move as well, with

National Semiconductor

(NSM)

adding 8% to $10.15, and

Advanced Micro Devices

(AMD) - Get Report

tacking on 11.3% to $2.76.

Since the latest lows, we've "had every administration official that can get in front of a camera say no banks are going to fail, and it's starting to take hold," says Marc Pado, U.S. market strategist for Cantor Fitzgerald. Also, "we've now had several banks report that they were profitable so far this year," he says, and that can't hurt.

"Since then, you had strong leadership in technology, not only did it

not

come close to taking out the November low, but it's also been very strong in this rally," says Pado. "When you see money flowing into tech, it says we're starting to have some faith that when we see growth, these are the companies that are going to outperform later this year."

In other tech news Tuesday,

Apple

(AAPL) - Get Report

introduced new iPhone applications

, while

Dell

(DELL) - Get Report

released its Adamo, the latest in the

ultra-thin notebook

trend.

Apple and Dell were up 4.4% and 4.9%, respectively.

A report from the Commerce Department offered a nice start to the day, showing that new-home construction and building permit applications both rose in February vs. expectations that those metrics would fall to new record lows.

Housing starts

rose to 583,000 from 477,000 in January, the first rise since May of 2008, although it was primarily in multi-family units. Building permits increased for the first time since June 2008, to 547,000, from 531,000 in January.

"Whether people can afford to purchase a home or obtain the credit necessary to do so is not as important as the fact that they need shelter and will rent space if necessary," wrote Tony Crescenzi, chief bond strategist at Miller Tabak. "The bottom-line is that empty homes will become occupied one way or another, so long as builders under-build relative to population growth."

In other economic data Tuesday, the producer price index, which measures wholesale prices, rose 0.1% in February, after an 0.4% increase in January. The core PPI rose 0.2%, just slightly more than expectations.

Economic news played opposite some less comforting corporate headlines.

Early Tuesday, steelmaker

Nucor

(NUE) - Get Report

dramatically lowered expectations for its first-quarter guidance, and is now expecting a loss of 55 cents to 65 cents a share, while analysts had pegged a profit 41 cents a share. "The economy has fallen off a cliff -- and there is no visibility as to the timing of the recovery," said Dan DiMicco, Nucor's CEO. Nucor shares fell 9.2% on the day to $33.55.

Aluminum producer

Alcoa

(AA) - Get Report

slid 8.7% to $5.59, leading the decliners on the Dow. Late Monday the company announced that in order to deal with the dent in aluminum demand, it will cut its dividend, scale back 2010 spending, and issue $1.1 billion in stock and convertible notes.

Nokia

(NOK) - Get Report

said it plans

to lay off 1,700 workers globally

at several units, as demand for cell phones wanes and it looks to cut costs, but its shares added 1.1%.

The fallout continued on Tuesday after

AIG

(AIG) - Get Report

riled taxpayers, politicians and investors alike with disclosures that the clearly troubled company plans

to pay out millions in bonuses

,

among other things

.

In Washington, the Federal Reserve started its two-day policy setting meeting today, and is expected to keep its key interest rate at a record low range.

Looking at commodities, oil rose $1.81 to settle at $49.16, while gold fell $5.20 to $916.80.

Europe's largest oil company

Royal Dutch Shell

said Tuesday that its

oil reserves

were unchanged at the end of 2008 vs. 2007, marking the first year since 2004 that the company hasn't pumped more oil than it added to the reserves.

Stocks in Europe were largely lower, while stocks in Asia were mixed. The FTSE in London and DAX in Frankfurt were lower by more than 1% apiece. In Asia, Hong Kong's Hang Seng fell 0.8%, but Japan's Nikkei added 3.2%.

In the bond market, longer-dated Treasuries were recently falling, after reversing direction twice midday. The 10-year note was losing 11.5/32 to yield 3%, and the 30-year was falling 31.5/32, yielding 3.8%. The dollar was recently stronger against the yen, and weaker vs. the euro and pound.