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Stocks open higher on Wall Street

October 20, 2009|Associated Press

NEW YORK — The stock market rallied Monday, setting one-year highs, after some earnings reports bolstered hopes that the economy was recovering faster than many expected.

Industrial equipment maker Eaton said it was seeing improvement in key markets and raised its full-year profit forecast. Newspaper giant Gannett managed to post a profit despite a sharp fall in revenue.

Shares of Eaton surged 5.7%, while Gannett shot up 8.2%.

Three of every four companies that have reported earnings for the July-to-September quarter have topped analysts' expectations, said Burt White, chief investment officer at LPL Financial in Boston.

"The recovery is moving faster than analysts can sharpen their pencils and revise their estimates upward," he said.

The Dow rose 96.28 points, or 1%, to 10,092.19. The broader Standard & Poor's 500 index rose 10.23 points, or 0.9%, to 1,097.91. The closes for both indexes were the highest since Oct. 3, 2008.

The Nasdaq composite index climbed 19.52, or 0.9%, to 2,176.32, its highest close since Sept. 26, 2008.

The Russell 2,000 index of smaller companies gained 1%.

After the closing bell, Apple and Texas Instruments reported results that beat forecasts. Shares of both tech companies gained in after-hours electronic trading.

Caterpillar, Coca-Cola and DuPont are slated to report results before the opening bell Tuesday.

The dollar mostly fell against other major currencies, while gold prices rose. Crude oil jumped $1.08 to $79.61 a barrel on the New York Mercantile Exchange. An index of commodity prices jumped 1.3% to its highest level of the year.

In overseas trading, key stock indexes rose 1.8% in Britain, 1.9% in Germany and 1.7% in France. Shares in Japan fell 0.2%.

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