Dow breaches 14k as US inflation falls
Dow Jones cross the 14,000 mark as US inflation falls unexpectedly, American Express leads march.
By Agencies |
NEW YORK: US stocks rose, sending the Dow Jones Industrial Average past 14,000 for the first time, after wholesale inflation unexpectedly declined and Goldman Sachs advised buying shares of American Express. American Express, the fourth-biggest US credit-card issuer, led the Dow average to a fourth-straight record.
Rohm & Haas, the largest maker of acrylics for paints and plastics, pushed a gauge of raw-materials producers to the steepest gain in the Standard & Poor’s 500 index on its plan for a $2 billion share buyback.
Financial companies, the worst performers in the S&P 500 this year, were helped by a government report showing prices paid to producers dropped for the first time in five months and by profit that topped analyst estimates at State Street.
“The market’s still not expensive,” said Owen Fitzpatrick, who helps oversee $25 billion as managing director at Deutsche Bank Private Wealth Management in New York. “Earnings growth is probably going to come in higher than what analysts are currently predicting.”
The S&P 500 increased 4.35, or 0.3%, to 1553.87 in the early morning trades in New York. The Dow average rose 43.09, or 0.3%, to 13,994.07 and climbed to as high as 14,002.60. The Nasdaq Composite Index added 11.56, or 0.4%, to 2708.89.
The Dow average has risen to records on each of the last four trading days, while the S&P 500 has set new highs on three out of four. American Express shares rose $2.34, or 3.8%, to $64.22. Goldman raised the shares to ‘buy’ from ‘neutral,’ saying its card-network business may be undervalued compared with rivals.
Rohm & Haas jumped $4.19, or 7.5%, to $59.92 for the top gain in the S&P 500. The company announced plans for $2 billion of share buybacks, including half to be repurchased during the third quarter.
Novellus Systems climbed $1.95 to $31.64 after the maker of equipment that helps turn silicon wafers into computer chips said second-quarter profit grew 8.8%.
The company also said orders may be little changed in the current period after falling in the second quarter, bucking expectations of another decline.
The 0.2% drop in the Labor Department’s producer price index compared with a forecast for a gain of 0.2%, according to economists surveyed by Bloomberg. Core prices, which exclude food and energy, rose 0.3%, reflecting a jump in automobile prices.
M&A
Takeovers also helped lift the market.
Lyondell Chemical Co. surged $6.97 to $47.09 after billionaire Len Blavatnik’s Access Industries Holdings LLC agreed to buy the chemical company for about $12 billion in cash, or $48 a share. That’s 45 percent higher than Lyondell’s closing price on May 10, the day before Access first disclosed an interest.
Pogo Producing Co. climbed $6.57 to $57.05 after Plains Exploration & Production Co. agreed to acquire the oil and natural-gas producer for about $3.6 billion in cash and stock.
Rohm & Haas, the largest maker of acrylics for paints and plastics, pushed a gauge of raw-materials producers to the steepest gain in the Standard & Poor’s 500 index on its plan for a $2 billion share buyback.
Financial companies, the worst performers in the S&P 500 this year, were helped by a government report showing prices paid to producers dropped for the first time in five months and by profit that topped analyst estimates at State Street.
“The market’s still not expensive,” said Owen Fitzpatrick, who helps oversee $25 billion as managing director at Deutsche Bank Private Wealth Management in New York. “Earnings growth is probably going to come in higher than what analysts are currently predicting.”
The S&P 500 increased 4.35, or 0.3%, to 1553.87 in the early morning trades in New York. The Dow average rose 43.09, or 0.3%, to 13,994.07 and climbed to as high as 14,002.60. The Nasdaq Composite Index added 11.56, or 0.4%, to 2708.89.
The Dow average has risen to records on each of the last four trading days, while the S&P 500 has set new highs on three out of four. American Express shares rose $2.34, or 3.8%, to $64.22. Goldman raised the shares to ‘buy’ from ‘neutral,’ saying its card-network business may be undervalued compared with rivals.
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State Street, the third-largest custodian of investor assets, surged $2.24 to $72.63. Second-quarter profit rose to $1.07 a share, topping the $1.02 expected by analysts in a Bloomberg survey.Rohm & Haas jumped $4.19, or 7.5%, to $59.92 for the top gain in the S&P 500. The company announced plans for $2 billion of share buybacks, including half to be repurchased during the third quarter.
Novellus Systems climbed $1.95 to $31.64 after the maker of equipment that helps turn silicon wafers into computer chips said second-quarter profit grew 8.8%.
The company also said orders may be little changed in the current period after falling in the second quarter, bucking expectations of another decline.
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Analysts expect earnings at S&P 500 companies to climb 4.8 percent on average in the second quarter, according to estimates compiled by Bloomberg.The 0.2% drop in the Labor Department’s producer price index compared with a forecast for a gain of 0.2%, according to economists surveyed by Bloomberg. Core prices, which exclude food and energy, rose 0.3%, reflecting a jump in automobile prices.
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Excluding passenger cars, core prices were up 0.1%.M&A
Takeovers also helped lift the market.
Lyondell Chemical Co. surged $6.97 to $47.09 after billionaire Len Blavatnik’s Access Industries Holdings LLC agreed to buy the chemical company for about $12 billion in cash, or $48 a share. That’s 45 percent higher than Lyondell’s closing price on May 10, the day before Access first disclosed an interest.
Pogo Producing Co. climbed $6.57 to $57.05 after Plains Exploration & Production Co. agreed to acquire the oil and natural-gas producer for about $3.6 billion in cash and stock.
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