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Stocks open higher after economic, corporate data

March 27, 2009|Times Staff and Wire Reports

The stock market extended its rally Thursday on fresh nuggets of upbeat news, sending the Dow Jones industrials up nearly 175 points to a six-week high and putting the Nasdaq composite index in positive territory for the year.

With just a few days left in the month, technology stocks reasserted themselves as some of the first quarter's biggest winners. Google jumped 2.7%, extending its year-to-date gain to 15%. Apple rose 3.2% and is up 29% for the year.

The tech-dominated Nasdaq surged 3.8% for the session and is up 0.6% for the year.

Unlike the Nasdaq, the Dow and the Standard & Poor's 500 index are still down since the end of 2008 -- by 9.7% and 7.8%, respectively -- despite the big rally of late.

But ever since the major indexes hit multiyear lows two and a half weeks ago, the Dow is up 21%, the S&P is up 23% and the Nasdaq is up 25%.

The Dow jumped 174.75 points, or 2.3%, on Thursday to close at 7,924.56, its highest close since Feb. 12. The blue-chip gauge remains down 44% from its record high in October 2007.

The S&P 500 rose 18.98 points, or 2.3%, to 832.86, and the Nasdaq rose 58.05 points to 1,587. The Russell 2,000 small-cap index of smaller companies soared 4.4%.

About four stocks rose for every one that fell on the New York Stock Exchange.

The overall market's advance Thursday was triggered by better-than-expected earnings from big consumer brands Best Buy, ConAgra Foods and Dr Pepper Snapple Group.

ConAgra, which owns the Healthy Choice and Peter Pan food brands, jumped 9.2%. Dr Pepper Snapple gained 15%.

Best Buy's stock shot up 13% after the electronics retailer's earnings helped stoke enthusiasm for the tech sector.

Even with the economy struggling, tech has appeal, said Paul Hickey, a principal at market research firm Bespoke Investment Group.

"When you get into an environment where companies are looking to cut costs, the argument is that tech can help you be more productive," Hickey said.

Plus, investors who now will bet only on financially strong companies have plenty to pick from in the tech sector.

"Tech companies have among the least debt of any sector," Hickey said.

Strong demand at the Treasury auction of seven-year notes also lifted stocks by helping investors set aside recent nervousness about the government's ability to fund its economic stimulus and financial bailout programs. The yield on the 10-year T-note slid to 2.73% from 2.77% late Wednesday.

Although the Dow could technically be considered to be in a bull market because it's up at least 20% from its recent low, analysts are hesitant to call the end of the bear market because the index could still turn down and fall below its March 9 low.

Oil futures set a high for the year, rising $1.57 to $54.34 a barrel on the New York Mercantile Exchange.

* U.S.-traded stocks of Chinese solar-power companies soared after Beijing introduced a subsidy to promote the use of alternative energy. Suntech Power Holdings, China's largest solar-components maker, gained 44%. LDK Solar, which manufactures solar wafers, jumped 32%. Yingli Green Energy, a maker pf photovoltaic cells, surged 45%.

Some U.S. solar companies also rallied on the news. First Solar jumped 12%.

* Foothill Ranch-based Wet Seal sank 11% after the teenage apparel chain's profit projection trailed analysts' estimates.

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