Wednesday, April 15, 2009

US Stocks Stage Late Rally On Economic Hope, AmEx Surges

. Wednesday, April 15, 2009

By stockOzone team

US stocks finished higher on Wednesday after Fed Beige Book fueled optimism that the recession is bottoming out.The Dow Jones Industrial Average gained 109.44 points or 1.38% to finish at 8,029.62. The S&P 500 added 10.56 points or 1.25% to end at 852.06. The Nasdaq Composite rose 1.08 points or 0.07% to 1,626.80.

Fed Beige Book, a survey of regional economic conditions, disclosed that several regions "saw signs that activity in some sectors was stabilizing at a low level ... (but) overall economic activity contracted further or remained weak.” Moreover, five of 12 Fed district banks “noted a moderation in the pace of decline,” the Beige Book business survey.

U.S. industrial production declined by 1.5% in March, worse than the 1 percent decline expected by economists, the Federal Reserve reported Wednesday. Also, the Fed said the rate of capacity utilization dropped to a record low of 69.3%, from 70.3% in February, the lowest level since it began publishing the number in 1967.

A release by Department of Labor on Wednesday showed consumer price index dropped 0.1% in March. The core consumer price index, which excludes food and energy, rose 0.2% in March. Economists had forecast an increase of 0.1% in consumer price index and a rise of 0.1% in core consumer price index.

Shares of financials finished up. American Express (NYSE: AXP) jumped $2.19 or 11.88% to $20.62 after the credit card lender said that charge-offs for managed consumer accounts rose at a slower pace in March. JP Morgan Chase (NYSE: JPM) soared $1.86 or 6.06% to $32.68. Bank of America (NYSE: BAC) rose 35 cents or 3.47% to $10.44. Goldman Sachs (NYSE: GS) surged $6.08 or 5.28% to $121.19. Citigroup (NYSE: C) fell 4 cents or 1% to close at $3.97.

Procter & Gamble Co. (NYSE: PG) advanced $1.50 or 3.17% to $48.75. The consumer giant said late Tuesday its board increased the quarterly dividend by 10% to 44 cents from 40 cents.

Intel (NASDAQ: INTC) slid 38 cents or 2.37% to $15.62. Late on Tuesday, the chipmaker announced that first-quarter net income fell 55% to $647 million, or 11 cents a share, from $1.4 billion, or 25 cents a share, in the prior year period. Revenue decreased to $7.1 billion from $9.7 billion a year ago. Looking ahead to the second quarter, the company said it is not providing a detailed revenue outlook, but that it is "planning for revenue approximately flat to the first quarter."

Early on Wednesday, Abbott Laboratories (NYSE: ABT) reported that first-quarter net income rose to $1.4 billion, or 92 cents a share, from $938 million, or 60 cents a share, in the year ago quarter. Revenue decreased to $6.7 billion from $6.8 billion. Shares of the company tumbled $2.05 or 4.59% to $42.66.
Disclosure: Author does not own any of the stocks discussed here.

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