U.S. stocks rallied, sending the Standard & Poor’s 500 index above its highest close in almost a month, after reports showed manufacturing in the New York region expanded for an 11th month and prices of imported goods declined.
Microsoft Corp. led technology companies higher after International Data Corp. reaffirmed its 2010 forecast for global personal computer shipments. Boeing Co. rose 3.8% after announcing plans to boost production of its best-selling 737 jet. Caterpillar Inc. rose 3.9% after reaffirming its earnings guidance for 2010. CBOE Holdings Inc., the last major U.S. securities exchange owned by its members, rallied on the first day of trading as a public company.
The Dow Jones industrial average surged 213.88 points, or 2.1%, to 10,404.77. The S&P 500 advanced 25.6 points, or 2.35% to 1,115.23, above its highest close since May 19. The Nasdaq rose 61.92 points, or 2.76%, to 2,305.88. All numbers are preliminary.
The S&P 500 is trading about 13.6 times analyst earnings estimates for the next year, near the lowest valuation since the index sank to a 12-year low in March 2009.
“The data give support to a modest recovery and where the market is today,” said Tom Wirth, senior investment officer for Chemung Canal Trust Co. “We’ve had a correction, and the market is settling in at a very reasonable valuation. I doubt we are going to have much more of this corrective phase of the bull market.”
All 57 stocks in the S&P 500 Industrials index gained after the Federal Reserve Bank of New York’s general economic index increased to 19.6, in line with the median forecast of economists surveyed by Bloomberg News. Prices of goods imported into the U.S. fell 0.6% in May, led by the biggest drop in petroleum costs since December 2008, Labor Department figures showed.