Stocks open higher at opening as global markets rise, investors regain some optimism
By Ieva M. Augstums, APTuesday, September 8, 2009
Stocks open higher amid optimism over recovery
The stock market is opening higher as merger news raised investors’ optimism about an economic recovery.
U.S. stocks are rising, following the lead of markets around the world. Investors are encouraged by news that two British mobile phone companies may combine. And while Cadbury PLC has rejected a takeover bid from Kraft Foods Inc., companies’ reviving interest in making acquisitions is being seen as a positive sign for the economy.
A weekend pledge by the world’s 20 biggest economies to support the global recovery with stimulus efforts is contributing to the markets’ positive tone.
In the early minutes of trading, the Dow Jones industrial average is up 63.48, or 0.7 percent, at 9,504.75. The Standard & Poor’s 500 index is up 9.31, or 0.9 percent, to 1,025.71, while the Nasdaq composite is up 19.36, or 1 percent, at 2,038.14.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
The stock market headed for a higher open Tuesday as merger news raised investors’ optimism about an economic recovery.
U.S. stock futures rose, following the lead of stock markets around the world. Investors were encouraged by news that two British mobile phone companies may combine. And while Cadbury PLC has rejected a takeover bid from Kraft Foods Inc., companies’ reviving interest in making acquisitions is being seen as a positive sign for the economy.
A weekend pledge by the world’s 20 biggest economies to support the global recovery with stimulus efforts is contributing to the markets’ positive tone. U.S. markets were closed Monday for Labor Day.
Ahead of the opening bell, Dow Jones industrial average futures rose 75, or 0.8 percent, to 9,492. Standard & Poor’s 500 index futures gained 10.00, or 1 percent, to 1,023.90, while Nasdaq 100 index futures rose 14.00, or 0.9 percent, to 1,649.75.
Overseas, Japan’s Nikkei stock average rose 0.7 percent. In afternoon trading, Britain’s FTSE 100 was up 0.5 percent, Germany’s DAX index was up 0.4 percent, and France’s CAC-40 was up 0.3 percent.
The increase in corporate activity suggests an improvement in businesses’ confidence and reinforces views that the worst of the global economic downturn could be over.
Still, many investors doubt that a strong recovery can be sustained over coming months, as unemployment continues to rise, putting pressure on households’ spending.
Tuesday afternoon, Wall Street will get a reading on consumers from the Federal Reserve’s report on their borrowing during July. Consumer credit likely fell by an annual rate of $4.5 billion in July, according to economists surveyed by Thomson Reuters. The report is due at 3 p.m. EDT.
The Labor Department reported last week that the unemployment rate jumped almost a half point to 9.7 percent in August, the highest since 1983. The concern is that rising unemployment will put more pressure on beleaguered consumers and further depress their spending.
Bond prices were mixed early Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.44 percent from 3.45 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.14 percent from 0.12 percent late Friday.
The dollar fell against other major currencies, while gold — which is typically bought as a safe haven asset — rose above $1,000 an ounce.
Tags: Commodity Markets, Europe, Labor day, North America, United Kingdom, United States, Western Europe