Market Climbs Third Straight Week
U.S. stocks rose for a third week, completing the Dow Jones industrial average's best month since 2002, as companies such as Motorola and MasterCard topped analysts' profit estimates.
Amgen, the world's largest biotechnology company, and Dow Chemical, the biggest U.S. chemical maker, gained after profits beat projections. General Electric surged 11 percent on speculation that new banking rules will allow it to keep its finance unit. Yahoo slumped after terms of an Internet-search accord with Microsoft were less favorable than predicted.
"What's been driving the market is the idea that maybe this recession isn't going to be as severe or prolonged as we thought," said Samuel Stewart, president of Wasatch Funds. "The market is now behaving as though the credit crisis was a blip on the radar."
The Standard & Poor's 500-stock index rose 0.8 percent, to 987.48, capping its fifth straight monthly advance. The main benchmark for American equity has rebounded 46 percent from a 12-year low on March 9. The Dow Jones industrial average rose 0.9 percent, to 9171.61, extending its monthly advance to 8.6 percent, the biggest in six years. The Nasdaq composite index climbed 0.6 percent, to 1978.5.
About three-quarters of the 148 companies in the S&P 500 that released second-quarter results this week topped estimates.
Reports next week should show employers cut jobs at a slower pace in July and an easing of the factory slump, according to economists' forecasts, suggesting the recession is ending.
Yields on 10-year Treasury securities declined as concern about future inflation eased. The 10-year note's yield dropped to 3.48 percent from 3.66 percent. The Treasury will auction $31 billion of three-month bills and $31 billion of six-month bills Aug. 3. They yielded 0.17 percent and 0.25 percent, respectively, in when-issued trading. The Treasury will sell one-month bills the next day.
-- Bloomberg News