Stocks Rise Amid Sign of Service-Sector Growth
Stocks advanced Monday after a better-than-expected reading on the service sector. Plus, investors did some bargain hunting after a two-week decline.
The Institute for Supply Management reported its gauge of service-sector activity, which accounts for 70 percent of the economy, rose to 50.9 in September from 48.4 in August. The reading indicates expansion in the sector after 11 straight months of contraction and was better than the 50 economists had expected.
Brocade Communications shares soared following news that data-equipment storage maker is putting itself up for sale. The Wall Street Journal identified Oracle and Hewlett-Packard as possible bidders.
In other deal news, Fordmay have another interested buyerfor Volvo, with the Financial Times reporting that A U.S. led consortium may challenge China's Geely Automotive in bidding for the unit. The consortium is led by former Ford director Michael Dingman and former auto executive Shamel Rushwin.
Goldman Sachs shares gained a day after a report said the company would be due a $1 billion paymentshould CIT Group file for bankruptcy. The money would come from a financing package Goldman gave the commercial mortgage giant in June 2008, according to the Financial Times.
Bank of America advanced following a CNBC report that the company likely would be selecting a successor very soonfor departing CEO Ken Lewis.
Prudential Financial shares advanced after the company announced it's considering selling its investment and fund-management businesses in South Korea in a deal that could be valued at $850 million.
Investors scooped up some bargains ahead of earnings season, which kicks off this week with a report from Alcoa on Wednesday.
The S&P 500 index soared 60 percent from March to late September but has fallen about 4 percent since then amid concerns about the economic recovery.
Britain's service sector expanded at its fastest pace for two years in September, and companies were more optimistic about the next 12 months than at any time since April 2007, data from the UK showed.
In the euro zone, the services economy returned to growth for the first time in 16 months in September at a slightly better rate than first expected, but job losses increased.
The Treasury kicks off this week with an auction of $7 billion in Treasury Inflation Protected Securities, or TIPS, with the results available shortly after 1pm ET.
— Peter Schacknow contributed to this report.
MONDAY: Supreme Court meets; ISM services index; Fed's Dudley speaks
TUESDAY: IMF meeting; Fed's Fisher, Hoenig speak; Earnings from Yum Brands
WEDNESDAY: Weekly mortgage applications; weekly crude inventories; consumer credit; Earnings from Costco, Family Dollar, Alcoa
THURSDAY: Chain-store sales; foreclosure report; BOE, ECB rate decisions; weekly jobless claims; wholesale trade; Fed's Hoenig speaks; Earnings from Pepsi, Marriott, Chevron (interim)
FRIDAY: Market peak 2-year anniversary (Dow at 14,164.53); international trade
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