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CNBC ON DIGG

Stocks Struggle to Push Higher After 5-Day Rally

Published: Friday, 11 Sep 2009 | 11:30 AM ET

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By: CNBC.com

Stocks struggled to push higher Friday as consumer confidence improved and economic bellwether FedEx raised its earnings forecast. The market also got a boost from surprisingly strong economic reports from China.

But profit taking after a five-day rally — the market's strongest run since November — clipped gains.

Major U.S. Indexes

.DJIA

.NCOMP

.SPX

The University of Michigan/Reuters gauge of consumer sentiment jumped to 70.2 in a mid-September reading, beating expectatoins, after a final August reading of 65.7. And their outlook for the next year was the highest since September 2007.

In the morning's other economic news, wholesale inventories fell 1.4 percent to their lowest level in nearly three years in July after a revised 2.1-percent drop in June. And import prices spiked 2 percent last month, which the Labor Department attributed to a jump in oil, as import prices excluding energy were up a more benign 0.4 percent.

This came after stocks logged five straight gains, their biggest winning streak since November, for a total gain of 3.7 percent.

World stocks hit fresh 11-month highs today as a weak dollar — indicating appetite for risk — and robust Chinese economic data boosted sentiment. The dollar hit its lowest level against a basked of currencies in a year.

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Gold hit a seven-month high above $1,011 an ounce as investors were looking for a hedge against the dollar's slide.

FedEx [FDX Loading... () ] shares shot up more than 5 percent after the economic bellwether raised its first-quarter earnings forecast, helped by cost cuts and better-than-expected international shipments.

The news also gave a boost to shares of rival package-delivery service UPS [UPS Loading... () ].

Financials were back in the spotlight after Treasury Secretary Timothy Geithner said the US government is anxious to shed stakes in financial companies but will take care not to do so too soon.

"The classic mistake that countries make in crises is they put the brakes on too early, they reignite the recession ultimately at much greater fiscal costs and much greater damage to the economy. That's the balance we've got to get right," Geithner told a CNBC town hall meeting.

Financial giant Morgan Stanley [MS Loading... () ] ticked higher after CEO John Thain confirmed he will step down early next year. Though the move was widely expected, it likely will intensify speculation about the firm's future direction.

Goldman Sachs [C Loading... () ] rose more than 1 percent after Citigroup raised its earnings projection for the firm, saying Goldman is poised to gain market share amid strong capital-markets activity, a drop in systemic risk and a better deal climate.

Campbell Soup [CPB Loading... () ] beat earnings expectations, helped by higher prices and increased sales of condensed soup and Prego pasta sauce as cost-conscious consumer ate at home more. The company also projected full-year earnings would top expectations.

In deal news, HSBC [HBC Loading... () ] has made a $1.63 billion bid for Dutch financial group ING's private banking business, Reuters said, quoting a report in The Sunday Times. Other bids are expected from DBS, a Singaporean investment fund, and Swiss wealth manager Julius Baer. American depositary shares of ING [ING Loading... () ] fell.

And Delta [DAL Loading... () ] may invest tens of billions in Japan Airlines [JAL Loading... () ], Asia's largest airline by revenue.

Alcoa [AA Loading... () ] shares rose after the aluminum producer and Dow component said it will continue working with Chinese companies in a quest for mergers and acquisitions.