Monday, June 1, 2009

Wall Street Ends Higher On Data, Cisco Jumps

. Monday, June 1, 2009

By stockOzone team

US stocks finished higher on Thursday as investors cheered better than expected economic data.The Dow Jones Industrial Average climbed 221.11 points or 2.60% to finish at 8,721.44. The S&P 500 increased 23.73 points or 2.58% to end at 942.87. The Nasdaq Composite leaped 54.35 points or 3.06% to 1,828.68.A report by Commerce Department showed US consumer spending decreased 0.5% in April. Economists expected consumer spending to drop 0.2%. Personal income rose 0.2% while personal savings rate climbed to a 14 year high of 5.7% in April.

A separate release by Commerce Department showed construction spending rose 0.8% in April. Economists were looking for a 1.2% drop in construction spending for April.

Meanwhile, the Institute for Supply Management said that its manufacturing index rose to 42.8% in May from 40.1% in April. Economists expected index to climb to 42%.

Early on Monday, troubled US automaker General Motors Corp. filed for Chapter 11 bankruptcy protection. On Sunday, senior officials in the Obama administration said that the U.S. government will provide $30 billion in additional financing to GM to allow t to continue to operate through a historic Chapter 11 bankruptcy proceeding. Earlier, officials confirmed that a majority of GM debt holders approved a deal to allow the embattled car maker to restructure its obligations. It is being seen as the largest industrial bankruptcy and four-largest overall in corporate history of United States.

The Dow Jones Indexes said on Monday that GM will be removed from the Dow Jones industrial average following its bankruptcy and will be replaced by Cisco Systems Inc (NASDAQ: CSCO). Citigroup Inc (C) too will lose its place from the Dow average and will be replaced by Travelers Cos Inc (NYSE: TRV) will take its place.

Alcoa (NYSE: AA), the largest US aluminum maker soared 61 cents or 6.62% to $9.83.

Shares of Boeing Co. (NYSE: BA) jumped $2.85 or 6.35% to $47.70.

Caterpillar (NYSE: CAT) surged $2.09 or 37.55% to $37.55.

Energy stocks settled higher.Exxon Mobil (NYSE: XOM) gained $2.41 or 3.48% to $71.76. Chevron
Corp. (NYSE: CVX) advanced $2.54 or 3.81% to $69.21.

Technology stocks rallied. Hewlett Packard (NYSE: HPQ) jumped $1.65 or 4.80% to $36. Intel Corp. (NASDAQ: INTC) soared 78 cents or 4.96% to $16.50. Microsoft Corp. (NASDAQ: MSFT) rose 51 cents or 2.44% to $21.40.

Cisco Systems Inc. (NASDAQ: CSCO), the world’s largest maker of networking equipment said on Friday that current fourth-quarter earnings per share will be 2 cents to 3 cents lower due to a tax-related charge. In a regulatory filing, the company said that it expects a charge of $130 million to $150 million related to a tax issue. Shares of the company rallied $1 o 5.41% to $19.50 on news of inclusion in Dow average.

Among financials, American Express (NYSE: AXP) rose $1.14 or 4.59% to $25.99 while JP Morgan (NYSE: JPM) declined 79 cents or 2.14% to $36.11.

Meanwhile, Goldman Sachs (NYSE: GS) is selling up to about $1.9 billion worth of shares in Industrial and Commercial Bank of China at a discount of 4 percent to 6 percent to the Chinese lender's Monday closing price.

European stocks settled with strong gains. The UK FTSE climbed 88.25 points or 2% to 4,506.19. The German DAX and French CAC rose 4.08% and 3.11% respectively.

Asian stocks finished solidly higher. The Nikkei 225 rose 155.25 points or 1.63% to 9,677.75. The Hang Seng index of Hong Kong advanced 717.59 points or 3.95% to 18,888.59.

NYMEX crude oil for July delivery climbed $2.11 or 3.2% tosettle at $68.42 a barrel.

Disclosure: Author does not own any of the stocks discussed here.

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