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Dow, S&P climb for fourth day in a row on surge in factory orders; Dow turns positive for 2011
NEW YORK (AP) ' The stock market is having a strong end to a wild month.
The Dow Jones industrial average turned positive for the year Wednesday after a surge in factory orders reassured investors that the manufacturing industry is still healthy. Industrial and raw materials companies had the biggest gains.
Factory orders rose 2.4 percent in July, the largest increase since March. Demand for cars jumped the most in eight years and orders for commercial airplanes soared. Orders fell 0.8 percent in June. That caused worries that manufacturing, one of the best-performing areas of the U.S. economy since the recession ended two years ago, might be starting to sputter.
The Dow rose 78 points, or 0.7 percent, to 11,638. It has risen seven of the last eight days and is up 0.5 percent for the year. Aluminum maker Alcoa Inc. rose 3.7 percent, the most of the 30 companies that make up the Dow average.
Joy Global rose 4.4 percent after the mining equipment maker said its earnings rose 46 percent because of strong global demand for commodities like copper and coal.
That helped to push up other stocks in the mining and commodities industry. Mining company Freeport-McMoRan Copper & Gold Inc. rose 3.8 percent. Equipment giant Caterpillar Inc. rose 2.8 percent.
The Standard & Poor's 500 index rose 9, or 0.8 percent, to 1,222. Nine of the 10 company groups that make up the index rose. The telecommunications industry was the only one to fall.
AT&T Inc. plunged 4.2 percent after the Justice Department filed a lawsuit to stop the company's $39 billion merger with rival T-Mobile USA. Sprint Nextel Corp., which opposed the deal, rose 6.8 percent. It had the biggest gain in the S&P 500.
The Nasdaq composite index rose 15, or 0.6 percent, to 2,591.
The Dow is closing out an extraordinarily volatile month. The Dow had four consecutive days of 400-point swings after S&P downgraded the U.S. government's credit rating Aug. 5, the first time that happened in the Dow's 115-year history.
The S&P 500 hit a low for the year on Aug. 8, right after the downgrade, and has risen 9.7 percent since then.
Rex Macey, chief investment officer of Wilmington Trust, said he expected the big swings to continue until investors can determine if the U.S. economy is headed for another recession or a recovery.
"When you're on the edge of growth versus recession, that's a big difference," he said. "Being near the precipice means that markets are going to be more volatile."