Earnings, economic optimism boost Wall Street

By Rodrigo Campos

NEW YORK (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) posted their biggest daily percentage gain in three months on Tuesday after strong revenue from drugmaker Merck and regional manufacturing data instilled confidence in the economic outlook.

Resource-related shares were among the strongest gainers as a weaker U.S. dollar sparked buying in oil and other commodities.

The CRB commodities index marked its largest one-day percentage advance in three months and energy company Chevron Corp was the top boost to the Dow industrials, up 2.8 percent to $72.99.

Shares of Merck & Co gained 2 percent to $37.66 after it posted quarterly revenue above analysts’ estimates.

“Earnings have been strong and people are starting to believe the recovery we’re seeing in the economy is real,” said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

“There’s more of a fear that investors will miss the next move up, as opposed to not being involved and watching the market go down.”

The S&P resumed weekly gains last Friday after four consecutive weeks of declines, which were triggered in part by fiscal weakness in Greece and other euro zone countries as well as uncertainty about China’s moves to curb bank lending.

The Dow Jones industrial average rose 169.67 points, or 1.68 percent, to 10,268.81. The Standard & Poor’s 500 Index added 19.36 points, or 1.80 percent, to 1,094.87. The Nasdaq Composite Index gained 30.66 points, or 1.40 percent, to 2,214.19.

In another boost to sentiment, the New York Federal Reserve Bank’s gauge of manufacturing in New York State rose more than expected in February as inventories jumped.

JPMorgan Chase & Co will buy the non-U.S. assets of commodities joint venture RBS Sempra from Royal Bank of Scotland and Sempra Energy for $1.7 billion in cash, roughly doubling its commodities client base and making the second-largest U.S. bank by assets even larger.

Financial stocks got a boost from Britain’s Barclays Plc, which said it nearly doubled profits in 2009 to $18.2 billion.

JPMorgan shares jumped 2.9 percent to $40.07 and the KBW bank index rose 2.5 percent.

Southern Company’s shares rose 2.3 percent to $31.88 after U.S. President Barack Obama announced loan guarantees of $8.3 billion to build the first U.S. nuclear plant in nearly three decades. Obama said the United States will not achieve a boost in nuclear capacity without “incentives to make clean energy profitable.

Southern subsidiary Georgia Power received the guarantees. The Market Vector Nuclear Energy ETF rose 3.2 percent to $21.80.

Simon Property Group Inc said it made a $10 billion offer for General Growth Properties Inc, boosting optimism in the battered commercial real estate market with a combination of the two largest U.S. shopping mall owners. Simon shares rose 3.9 percent to $74.82.

On the Nasdaq, shares of chipmaker Intel rose 1.4 percent to $20.72 after a brokerage raised its rating on the stock.

About 7.59 billion shares were traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 5 to 1, while on the Nasdaq, about five stocks rose for every two that fell.

Stock Basics

(Editing by Kenneth Barry)

Earnings, economic optimism boost Wall Street