Wall Street begins 2nd quarter slightly higher
NEW YORK -- Wall Street began the second quarter on solid footing today, moving higher as investors took better-than-expected economic data as a reason to buy up financial, technology and energy stocks.
Pending home sales rebounded in February from a record low, the National Association of Realtors reported, while the Institute for Supply Management's index of manufacturing activity contracted in March but by a bit less than anticipated.
Construction spending dropped in February for the fifth straight month, but at a slower pace than in January.
Not all of the reports came as a relief though. The ADP National Employment Report said private sector employment dropped by 742,000 in March. The figure was higher than anticipated, and a rattling sign ahead of the Labor Department's Friday report on nationwide job cuts last month.
This week so far has been volatile, with the Dow Jones industrials gaining 87 points on Tuesday after plunging Monday by 254 points on President Barack Obama's rejection of General Motors Corp. and Chrysler LLC.'s restructuring plans.
Analysts expect that theme to continue ahead of first quarter earnings reports in the coming weeks.
"The one forecast you can make is for continued volatility," said Bill Stone, chief investment strategist at PNC Wealth Management. "People seem to swing from one side to the other of 'the recovery has started' to 'the world is ending again.' "
Financial stocks led the market higher Wednesday, followed by big gains in the technology and energy sectors. As sentiment about the economy has improved in recent weeks, investors have been buying up companies in industries they believe are likely to lead the country out of recession.
In midday trading, the Dow jumped 110.87, or 1.5 percent, to 7,719.79.
The Standard & Poor's 500 index rose 9.85, or 1.2 percent, to 807.72. The technology-heavy Nasdaq composite index gained 18.67, or 1.2 percent, to 1,547.26.
The Russell 2000 index of smaller companies rose 5.66, or 1.3 percent, to 428.41.
Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 536.9 million shares.
The market's advance came as the world's finance ministers gathered in London to discuss the slumping global economy. Speculation has risen in recent days that the various countries in the Group of 20 are disagreeing about how to handle the global financial crisis. Amid the backdrop of thousands of protesters, British Prime Minister Gordon Brown said Wednesday that the G20 was close to agreeing on global reforms for the financial system.
