US Stocks Erase Last Week's Losses; S&P Ends With Nearly Four-Year High
March 26 2012 - 4:00PM
Dow Jones News
Stocks advanced after Federal Reserve Chairman Ben Bernanke
emphasized that low interest rates are still needed to support the
labor market, driving the S&P 500 to another nearly four-year
high.
Stocks opened higher on Monday and then padded gains throughout
trading session, wiping away all of last week's losses, which were
the steepest this year.
Before the opening bell, Bernanke said that continued
accommodative policies were needed to confront deep problems in the
jobs market. Some interpreted the statement to mean the door
remains open for another round of monetary stimulus from the
central bank.
"The Bernanke speech reiterated that the Fed may not do anything
now, but they aren't taking further policy options off the table,"
said Bill Stone, chief investment strategist at PNC Asset
Management Group.
The Dow Jones Industrial Average advanced 160.90 points, or
1.2%, to 13241.63. The Standard & Poor's 500-stock index rose
19.40 points, or 1.4%, to 1416.51 and ended the session with its
highest close since May 19, 2008. The Nasdaq Composite climbed
54.65 points, or 1.8%, to 3122.57, its highest finish in more than
a decade.
Health care stocks like Merck, up 1.7%, and Pfizer, up 1.6%,
spearheaded Monday's gains, followed closely by technology and
consumer discretionary stocks. All 10 of the S&P 500's sectors
gained ground. American Express rose 2.5%, J.P. Morgan Chase rose
2.2% and United Technologies rose 2.1%.
A pair of soft readings on the domestic economy did nothing to
hinder Monday's stock-market gains. Pending home sales fell
slightly in February versus expectations for a modest gain.
Separately, data showed business conditions in Texas-area
manufacturing are expanding this month but at a slower pace than in
February.
In Europe, the Stoxx Europe 600 closed up 0.9%, after Germany's
Ifo Institute said its business-confidence index for March slightly
exceeded expectations and rose to the highest reading in nine
months.
Concerns about whether Spain can implement austerity measures
eased after Germany officially backed down from its strict stance
against bolstering Europe's bailout funds.
The tone for today's gains was set by "better data out of
Germany, combined with plans for a larger firewall to help prevent
contain problems in the euro zone," Stone said.
In corporate news, Lions Gate Entertainment climbed 4.5% after
"The Hunger Games" grossed $155 million in North America over the
weekend, enough to be the third-largest opening weekend ever.
Cal-Maine Foods fell 6.1% after the egg producer reported fiscal
third-quarter earnings that topped estimates, though revenue fell
short of expectations, and gross margins declined with rising feed
costs.
Arena Pharmaceuticals surged 25% after the company said its
weight-loss drug candidate lorcaserin was accepted for review by
European regulators, and confirmed that a U.S. Food and Drug
Administration advisory committee will meet to discuss the
company's resubmitted application.
Safeway was the biggest decliner on the S&P 500, down 3.4%,
after Credit Suisse cut its stock-recommendation rating to
"neutral" from "outperform," citing concern that liabilities for
the grocery-store operator's pension plans may affect the stock's
valuation in the long term.
Buffalo Wild Wings jumped 7.3% as analysts at Stephens raised
the stock's price target, noting expectations for the sports bar
and grill to post strong first-quarter results.
-By Chris Dieterich, Dow Jones Newswires; 212-416-2611;
christopher.dieterich@dowjones.com
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