Stocks Rise, Led by Tech; Telecom Falls
Stocks gained Wednesday as commodity prices lifted mining stocks, and as tech stocks appeared to continue to benefit from M&A activity.
The Dow Jones Industrial Average more than 30 points after falling by six points on Tuesday.
Most Dow components gained, led by Cisco , American Express , and Hewlett-Packard while Home Depot fell.
The S&P 500 and the Nasdaq also gained. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 17.
Among key S&P sectors, technology, energy and consumerdiscretionary rose, while telecom slipped.
Commodity prices resumed their climb, hitting new levels. Gold prices hit an all-time high of $1,460 an ounceovernight, and is now trading slightly lower, although still above $1,258, as silver also continues to climb to record levels. The dollar , meanwhile, traded flat against a basket of currencies.
Oil prices remained higher even after news that crude stocks in the U.S. rose 1.95 million barrels last week, which was more than expected. London Brent crude rose to near 2 1/2-year highs to more than $122 a barrel as U.S. light crudetraded above $108 a barrel.
The commodities surge spilled over to stocks. Among mining stocks, Freeport McMoran Copper & Gold gained more than 2 percent and Barrick rose nearly 1 percent. Silver mining companies also gained, including Pan American Silver and Hecla Mining .
M&A activity continues to dominate headlines for stocks.
NYSE Euronext'sboard of directors plans to meet by April 14 to consider Nasdaq OMX Group's unsolicited takeover bid, though no firm date has been set, a person familiar with the plan told Reuters Tuesday. A NYSE spokesman told CNBC that the Nasdaq counteroffer: "Is not an alternative we are considering, period."
Most semiconductor stocks rose on Wednesday in the wake of Texas Instrument's $6.5 billion all-cash bid for National Semiconductor .
The iShares PHLX SOX Semiconductor Sector Index Fund gained another 1 percent after advancing on Tuesday. Advanced Microdevices and Micron were among the gaineres.
Also on the tech front, Broadcomm soared after Oppenheimer upgraded the communications semiconductor provider to "outperform" from "perform," citing the growth in wireless markets and networking.
In earnings news, Monsanto traded slightly lower after reporting disappointing revenues, although the fertilizer producer beat estimates for its earnings per share and confirmed guidance for the year. Bed, Bath & Beyond reports earnings after the market closes.
Retail stocks will be in the spotlight on Thursday when monthly same-store sales are released by individual retailers. Some insight arrived early Wednesday with a report showing consumers are still spending, but at a slower rate than a year ago, because Easter is late this year and consumers are beginning to worry about rising gas prices.
One retailer on the rise is Abercrombie & Fitch , which received price target upgrades from several brokerages on Wednesday after it forecast strong profits next year at an analyst meeting a day earlier. Rivals Aeropostale , Delia's and Urban Outfitters also gained.
In the U.S., Congress faces a Friday deadline to approve a spending bill. Negotiations will continue Wednesday.
In economic news, the Mortgage Bankers Association'sweekly gauge of mortgage loan activity dropped 2 percent in the week ended April 1, led by refinancing applications, which fell 6.2 percent.
Meanwhile, Atlanta Federal Reserve Bank President Dennis Lockhart said the economy remains too fragile to begin raising rates in comments to reporters Wednesday. Lockhart also said the central bank had no compelling reason to shift course on its $600 billion bond buying program. Some members have hinted that the Fed could cut the program short.
On Tuesday, the Fed released minutes of its last policy setting meeting that showed Fed members are divided on the need for further stimulus and future interest rate increases.
Investors were encouraged by an improving situation in Japanwhere engineers stopped highly radioactive water leaking into the sea from the earthquake-hit Fukushima nuclear plant.
Although the news brought some relief, nuclear experts warned the crisis was far from over. Concerns over the impact of the earthquake and tsunami on Japan’s economy also still lingered, with investors looking out for signals from the Bank of Japan after its two-day policy meeting Thursday that it may ease monetary policy.
In Europe, Portugal raised 1 billion euros in a short-term debt auction Wednesday, but at a high price.
Separately, the Financial Times Deutschland reported on Wednesday that some euro zone governments are concerned highly indebted Greece will not be able to refinance itself and may have to restructure its debt.
On Tap This Week:
WEDNESDAY: Treasury STRIPS; Earnings from Bed Bath & Beyond.
THURSDAY: Monthly chain-store sales, Bank of England Announcement, European Central Bank announcement, jobless claims, consumer credit, money supply; Lacker speaks; earnings from Constellation Brands before-the-bell and Rite Aid after-the-bell.
FRIDAY: Wholesale trade.
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