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Stocks open higher ahead of week's key data

June 30, 2009|Times Wire Reports

NEW YORK — Stocks rose sharply Monday as a jump in oil prices lifted shares of energy companies and fund managers snapped up recent winners to burnish their end-of-the-quarter portfolios.

Financial stocks, which have led the way up for much of the second quarter, rose again Monday, followed by the tech sector.

Fund managers appeared to be enhancing their portfolios before the quarter ends today in a ritual known as "window dressing": scooping up stocks that have done well in the last three months. That pushed up the prices of the quarter's winners even more. The practice probably also helped the stock market overall, as managers shifted money into stocks from cash.

The benchmark Standard & Poor's 500 stock index is up 16% so far for the quarter, putting it on track for its best three months since the fourth quarter of 1998, when it shot up 21%. Since closing at a 12-year low in early March, the S&P 500 has gained 37% on early signs of an economic rebound.

"This has been a heck of a run," said Marc Pado, U.S. market strategist at Cantor Fitzgerald in San Francisco. "A lot of people didn't believe and left a lot at the table."

By making the right trades now, "You can show you own the names that everyone knows did well," he said.

For the day, the Dow Jones industrial average gained 90.99 points, or 1.1%, to 8,529.38. The S&P 500 climbed 8.33 points, or 0.91%, to 927.23. The Nasdaq composite index rose 5.84 points, or 0.3%, to 1,844.06.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by 3 to 2. Volume was light.

The S&P financial sector is up 37% in the last three months, while technology is up 20% and energy is up 11%.

Shares of home builders helped underpin the market Monday after Credit Suisse raised its rating on Los Angeles-based KB Home, citing stronger orders. KB's shares rose 5.1%.

Wall Street's eyes and ears also were on the news coverage of Bernard Madoff, who was sentenced to 150 years in prison Monday for running a massive Ponzi scheme.

Oil futures jumped $2.33 to $71.49 a barrel after Nigerian militants said they attacked the country's oil facilities, which set off some concerns about supply.

For the day, the S&P energy index was up 1.3%. Occidental Petroleum jumped 2.9% and Exxon Mobil climbed 2%.

Among tech stocks, Microsoft advanced 2.2% to $23.86 after Deutsche Bank raised its projected price for the stock to $30 from $22.

Signs of life in foreign stock markets added to Wall Street's positive mood. Shanghai's benchmark index set a fourth straight one-year closing high on signs of an economic recovery in China.

Elsewhere overseas, key indexes rose 1.3% in Britain, 2.3% in Germany and 2% in France. But shares fell 1% in Japan.

Treasury bond yields fell again. The yield on the benchmark 10-year Treasury note dropped to 3.49% from 3.5% late Friday.

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