Connect with us

Hi, what are you looking for?


Ford profit propel Wall Street

NEW YORK, Nov 3 – Wall Street stocks rose in hesitant trade Monday after a surprise profit reported by Ford Motor Co. and a strong factory sector survey boosted sentiment after last week\’s drubbing.

The Dow Jones Industrial Average climbed 76.71 points (0.79 percent) to end at 9,789.44, coming off a 2.6 percent slide for the blue-chip index last week.

The Nasdaq composite managed a gain of 4.09 points (0.20 percent) to 2,049.20 and the broad-market Standard & Poor\’s 500 index advanced 6.69 points (0.65 percent) to 1,042.88.

Trading action was choppy, as the indexes swung between gains and losses but with a mostly positive bias.

Market sentiment was helped by news ahead of the bell of Ford\’s third-quarter profit of 997 million dollars on improvement in its North American business, and comments that it was on track to become "solidly profitable."

Douglas McIntyre at 24/7 Wall Street called the earnings at the number two automaker "a little miracle."

"Almost no one thought Ford could make money in North America — except Ford," he said.

Gains accelerated after the Institute of Supply Management said its purchasing managers index of the factory sector rose to a stronger-than-expected 55.7 percent, suggesting stronger growth in manufacturing and gains in factory employment.

"The report suggests that the US manufacturing sector picked up considerable steam in October," said Millan Mulraine at TD Securities.

Advertisement. Scroll to continue reading.

"Moreover, given the fairly good performance of this indicator in predicting the performance of the US economy more generally, it is pointing to further upward momentum in US economic activity."

Some analysts said that positive news is losing its ability to spark gains after the spectacular rally of over 60 percent from lows in March.

"The good news has already been discounted in stock prices, and the ongoing rebound in the markets may be suffering from \’rally exhaustion,\’" said Mike Schwager, chief market strategist at Claymore Securities.

"While my bias is for the market to continue on an upward trajectory over the intermediate term, the markets have also discounted a lot of good news and may need to go through a period of consolidation to filter out any excesses."

Among key stocks, Ford powered higher by 8.29 percent to 7.58 dollars after its results surprised analysts expecting another loss from the auto giant.

Clorox Co. added 0.29 percent to 59.40 dollars after the maker of bleach and cleaning products reported better-than-expected earnings in the past quarter.

Meanwhile business lender CIT Group plunged 65 percent to 25 cents after its weekend announcement of a bankruptcy filing.

Bonds slipped. The yield on the 10-year US Treasury bond increased to 3.422 percent from 3.392 percent Friday and that on the 30-year bond rose to 4.268 percent from 4.236 percent. Bond yields and prices move in opposite directions.

Advertisement. Scroll to continue reading.

More on Capital Business