Stocks rise after increase in consumer spending
by Associated Press
Published: March 29,2010
The Dow Jones industrial average rose 46 points Monday and broader indexes also climbed after the Commerce Department said consumer spending rose for the fifth straight month in February. The 0.3 percent gain was in line with economists’ expectations and raised hopes that the biggest driver of the economy is continuing to rebound.
Job creation and solid consumer spending are considered crucial to a sustained recovery. At the end of the week, investors will get the Labor Department’s monthly employment report. Analysts predict that employers added jobs in March for only the second time since the recession began in December 2007.
Meanwhile, easing concern about debt problems in Greece reduced demand for the dollar. The dollar’s drop in turn lifted demand for commodities, which become more attractive to foreign investors when the dollar falls because most of them are priced in dollars. Energy and materials stocks including Exxon Mobil Corp. and Alcoa Inc. were among the day’s biggest gainers.
The debt-strapped Greek government raised $6.74 billion Monday by issuing seven-year bonds. The country’s ability to borrow is an important sign of confidence after European leaders and the International Monetary Fund last week agreed to provide a financial safety net for Greece and other countries that use the euro if they couldn’t issue debt.
Financial shares were mixed after the Treasury Department said it would start to sell the shares it owns in Citigroup Inc. The government took 7.7 billion Citigroup shares in exchange for $25 billion it gave the bank during the 2008 credit crisis. The planned sale during the next year could result in a profit of more than $7.5 billion.
The advance Monday extended a run of incremental gains since early February on expectations that the economy is improving.
“It’s more of a slow steady grind higher,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati.
According to preliminary calculations, the Dow rose 45.50, or 0.4 percent, to 10,895.86. The climb brought the psychological threshold of 11,000 closer. The Dow hasn’t traded above that level since September 2008.
The broader Standard & Poor’s 500 index rose 6.63, or 0.6 percent, to 1,173.22, and the Nasdaq composite index rose 9.23, or 0.4 percent, to 2,404.36.
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