Wall Street enjoys rally

0 Comments | Oakland Tribune, Dec 11, 2007

NEW YORK -- Wall Street advanced Monday as expectations for an interest rate cut from the Federal Reserve and an uptick in pending home sales helped offset concerns about another round of subprime mortgage-related losses. The Dow Jones industrials gained more than 100 points.

The Dow rose 101.45, or 0.74 percent, to 13,727.03.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 11.17, or 0.74 percent, to 1,515.83. The Nasdaq composite index added 12.79, or 0.47 percent, to 2,718.95.

Bond prices fell. The 10-year Treasury note's yield, which moves opposite the price, rose to 4.16 percent from 4.12 percent late Friday.

The dollar was mixed against other major currencies, and gold prices rose.

Wall Street has posted robust gains recently as investors grew more confident in the Fed's openness to loosening its policy again. The Dow has risen more than 740 points over the last two weeks, a rally that has brought the blue-chip index to about 3 percent below the record close it reached Oct. 9.

WaMu's shares shed 88 cents, or 4.4 percent, to $19 in aftermarket activity, after the stock rose 85 cents, or 4.5 percent, to close at $19.88.

Blackstone Group LP might be planning a bid to acquire steel company Rio Tinto Ltd., according to Britain's Daily Telegraph. Blackstone would lead a consortium that would include China's sovereign wealth fund, according to the report. Blackstone rose $1.52, or 6.9 percent, to $23.45, and Rio Tinto rose $9.71, or 2.1 percent, to $477.71.

McDonald's Corp., the world's largest fast-food company, said global same-store sales rose 8.2 percent in November. Much of the strength came from overseas, including Europe and Asia. McDonald's, one of the 30 Dow components, rose $1.74, or 2.9 percent, to $61.90.

Shares of Dow component Caterpillar Inc. advanced after a Bear Stearns analyst highlighted the construction and farm equipment maker's focus on China, where the construction market is expected to keep surging. The stock rose $2.38, or 3.2 percent, to $76.58.

Oil prices were volatile amid end-of-year position taking and anticipation of Tuesday's Fed meeting. Light, sweet crude reversed course to close down 42 cents to $87.86 a barrel on the New York Mercantile Exchange.

The Russell 2000 index of smaller companies rose 5.68, or 0.72 percent, to 791.22.

Advancing issues outnumbered decliners by slightly less than 2 to 1 on the New York Stock Exchange. Consolidated volume came to 2.81 billion shares, compared with 2.88 billion shares on Friday.

Overseas, Japan's Nikkei stock average closed down 0.20 percent, while Hong Kong's Hang Seng index fell 1.18 percent. Britain's FTSE 100 rose 0.16 percent, Germany's DAX index rose 0.49 percent, and France's CAC-40 increased 0.56 percent.