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Dow, S&P move higher after rise in leading indicators index; borrowing rates ease in Europe
Signs of future growth in the U.S. economy and a drop in borrowing costs for embattled European countries pushed stocks higher in morning trading Friday.
The Conference Board's index of leading economic indicators rose more than Wall Street analysts were expecting, a sign that the economy may pick up in the coming months.
Companies that rely most heavily on economic expansion to make money had the biggest gains. Hewlett-Packard Co. jumped 3.6 percent, the most of the 30 stocks in the Dow Jones industrial average. Boeing Co. and Alcoa Inc. each rose 2 percent.
The Dow was up 80 points, or 0.7 percent, to 11,852 at 11 a.m. Eastern time. The Standard & Poor's 500 index rose 7, or 0.6 percent, to 1,222. Telecommunications and technology were the only industries in the S&P 500 index to fall.
The Nasdaq composite index rose 5, or 0.2 percent, to 2,592.
Stock indexes were also bolstered by easing borrowing costs for Italy and Spain. That is a signal that bond investors are less fearful of a default by those countries. Spain and Italy have had to pay high interest rates because bondholders fear that that they will default. Holders of Greek bonds were all but forced to take steep losses on that nation's debt.
Europe's debt problems are far from settled, however. Comments by German and British leaders Friday suggested that they have divergent views on how to address the debt crisis. German Chancellor Angela Merkel cautioned against expecting too much from the region's leaders. British Prime Minister David Cameron called for "decisive action" to shore up the struggling currency union.
In corporate news, ketchup maker H.J. Heinz Co. fell 2.5 percent after it said its second-quarter net income fell almost 6 percent, although its adjusted results narrowly beat expectations. Sales in emerging markets remained strong, and price hikes in other areas helped offset lower volumes.
Retailer Gap Inc. slid 3.5 percent after its third quarter revenue came in slightly below Wall Street's forecasts. The company said materials costs are continuing to eat into profit margins. Salesforce.com plunged 9 percent after its quarterly results came in below estimates.