``It's a good time for long-term investors to start buying trading companies
and other exporters because they were definitely oversold,'' said Masayuki
Kubota, who oversees $2.1 billion in assets at Daiwa SB Investments Ltd. in
Tokyo. ``Growth in emerging markets is supporting the global economy, including
that of the U.S.''
BHP, the world's largest mining company, gained 2.4 percent to A$39.35. Rio
Tinto Group, the third-biggest, climbed 2 percent to A$100. Sumitomo Metal
Mining Co., Japan's biggest nickel producer, advanced 2.2 percent to 2,325 yen.
``Good commodity prices means good profit for those stocks and good growth,''
said Hans Kunnen, who helps manage the equivalent of $117 billion at Colonial
First State Global Asset Management in Sydney.
Aria Bela Nusa <[EMAIL PROTECTED]> wrote:
http://biz.yahoo.com/ap/070911/wall_street.html?.v=45
AP
Stocks End Higher on Hopes for Rate Cut
Tuesday September 11, 6:44 pm ET
By Joe Bel Bruno, AP Business Writer
Wall Street Holds Gains on Further Hopes Interest Rate Cut Is on the Way
NEW YORK (AP) -- Wall Street rose sharply Tuesday as investors grew more
confident that the Federal Reserve will lower interest rates next week, even
after its chairman gave no clues about the central bank's intentions. The Dow
Jones industrials rose 180 points.
Traders had been hoping Fed Chairman Ben Bernanke would give some indication
during a speech to Germany's Bundesbank about the Fed's next move. Wall Street
is looking for a rate cut to help bolster the U.S. economy and ease problems
caused by tightening credit availability.
Instead, Bernanke talked about the need for countries around the globe to
cooperate toward economic stability. He said "global imbalances" occur when
countries run up trade deficits or produce big trade surpluses.
"Bernanke didn't really say anything about interest rates, but at this point
the feeling on Wall Street is that it's mandatory," said Steven Goldman, chief
market strategist, Weeden & Co., speaking about a rate cut. "At this point, the
market is pricing in not just one rate cut, but a couple, and that's helping to
stabilize stocks."
The stock market has been volatile since midsummer, with jitters high about
the sluggish housing market and debt aversion causing a standstill in the
credit markets and damaging the economy. Last Friday's jobs report, which
showed the first monthly payrolls decline in four years, aggravated those
concerns. Mark Zandi, chief economist at Moody's Economy.com, predicted the
risk of a recession in the next six to 12 months has increased to nearly 40
percent from less than 15 percent before subprime concerns began riling the
markets.
Investors nervous about the U.S. economy slipping into recession got a bit of
relief from the Commerce Department's report on the U.S. trade deficit. The
trade gap narrowed modestly in July to $59.2 billion from $59.4 billion in
June, thanks to record exports of farm goods, autos and other products. Many
economists had anticipated a widening of the deficit.
The Dow rose 180.54, or 1.38 percent, to 13,308.39.
The Standard & Poor's 500 index rose 19.79, or 1.36 percent, to 1,471.49,
while the Nasdaq composite index rose 38.36, or 1.50 percent, to 2,597.47.
Bonds fell as investors withdrew money to buy stocks, pushing the 10-year
Treasury note's yield up to 4.37 percent from 4.27 percent late Monday. The
dollar weakened against the euro and British pound, while gold moved higher.
Tim Krause, director of risk management at California-based Zecco Trading,
agreed that Tuesday's rally was due to institutional investors being optimistic
about a rate cut. However, he's not entirely convinced the Fed will cut rates
,given that it will impact an already weakened dollar -- which is now near a
record low versus the euro.
"The Fed is between a rock and a hard place," he said. "If they lower
interest rates, the dollar will keep getting crushed. If they don't, the
subprime mess will get worse and hurt the housing market."
Though much of the attention was on the central bank, there was some
corporate news that influenced stocks.
The Nasdaq got a boost due to ImClone Systems Inc., which along with
Bristol-Myers Squibb Co. said the drug Erbitux improved the survival rate of
lung cancer patients in a late-stage study. ImClone soared $6.97, or 18.4
percent, to $44.90. Bristol-Myers rose 23 cents to $28.23.
The Dow, meanwhile, benefited from strong gains in McDonald's Corp. shares.
The fast food chain, which is one of the 30 companies that make up the Dow,
rose $1.61, or 3.2 percent, to $51.76 after reporting that global sales at
restaurants open at least a year rose 8.1 percent in August.
Boeing Co. also helped the blue chips advance after it was awarded a $1.1
billion U.S. Air Force contract. Shares picked up $2.11, or 2.2 percent, to
$97.44.
General Motors Corp. rose $1.33, or 4.6 percent, to $30.54 as investors got a
glimpse of new models at the Frankfurt Auto Show.
Crude oil rose 74 cents to $78.23 after OPEC agreed to boost its crude output
by 500,000 barrels a day in an effort to calm markets unnerved by high energy
prices and worried that supplies could grow tight by the end of the year. It
was expected that OPEC would keep current output targets in place, although
Saudi Arabia was said to be pushing for a production increase.
Advancing issues outnumbers decliners about 2 to 1 on the New York Stock
Exchange, where consolidated volume came to 2.97 billion shares, compared to
2.87 billion on Monday.
The Russell 2000 index of smaller companies was up 12.46, or 1.62 percent, at
782.27.
Overseas, Japan's Nikkei stock average added 0.71 percent. Britain's FTSE 100
rose 2.13 percent, Germany's DAX index rose 1.02 percent, and France's CAC-40
rose 1.69 percent.
European equity markets looked past a pared-back forecast for annual economic
growth on Tuesday. The European Commission cut its growth estimate to 2.5
percent from 2.6 percent, saying the region's economy may have peaked as
tighter credit conditions raise the risk of a global slowdown.
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
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