NEW YORK - US stocks rallied on Wednesday as stronger-than-expected earnings and a positive outlook from Cisco Systems Inc. boosted sentiment, along with news that Pfizer Inc. may sell its consumer division.
Stocks ended near the day's highs, with the Dow industrials gaining 1 per cent in their biggest rise
since the year's opening session on January 3.
Investors were encouraged by merger and acquisition talk, with Pfizer saying it might spin off or sell its consumer products division. Pfizer's stock advanced 5.7 per cent to US$26.37 on the New York Stock Exchange and ranked as the biggest gainer in the S&P 500.
Cisco's shares had their biggest daily percentage gain in more than two years. The communications equipment maker's profit beat analysts' expectations and it gave an optimistic outlook late Tuesday, which broke a string of several weeks worth of disappointing technology earnings.
"Corporate news has been pretty good, economic news has been pretty healthy and a lot of times, fundamentals trump what everybody's worried about it," said John Caldwell, chief investment strategist at McDonald Financial Group, part of KeyCorp.
The Dow Jones industrial average was up 108.86 points, or 1.01 per cent, at 10,858.62. The Standard & Poor's 500 Index was up 10.87 points, or 0.87 per cent, at 1,265.65. The Nasdaq Composite Index was up 22.02 points, or 0.98 per cent, at 2,266.98.
Former Fed Chairman Alan Greenspan, just a week after leaving the Federal Reserve, made upbeat remarks on the US economy at several private events, sources said on Wednesday, causing a stir in financial markets worried about future interest-rate hikes.
"There are noticeable recoveries. Just in the health care sector, the DRG index is outperforming the overall market, and Pfizer is the largest component," Caldwell said.
"Clearly, there's something favourable happening in that group, but it's not the only one." The American Stock Exchange pharmaceutical companies index rose 1.5 per cent.
In other drug sector news, London-based drug maker GlaxoSmithKline Plc beat forecasts for 2005 profits and predicted earnings growth of about 10 per cent this year. Shares traded in the United States gained 1.3 per cent, or 64 cents, to US$50.95 on the NYSE.
Cisco rose 7.2 per cent, or US$1.31, to US$19.40 and helped lift both the Nasdaq and the Standard & Poor's 500.
Other tech stocks on the rise included computer and printer maker Hewlett-Packard Co., up 5.4 per cent, or US$1.64, at US$32.01 and among the Dow's major gainers, as well as wireless technology company Qualcomm Inc., up 2.1 per cent, or US$1.24, at US$46.97. Qualcomm ranked second only to Cisco among the Nasdaq 100's biggest advancers.
In other deal news, Spanish-language broadcaster Univision Communications Inc. is considering selling itself, a source familiar with the matter said.
Univision shares jumped 12 per cent, or US$3.66, to US$34.20 on the NYSE.
PepsiCo Inc., the world's No. 2 soft-drink company, posted quarterly results in line with analysts' estimates and revenues that beat expectations. PepsiCo shares added 0.7 per cent, or 42 cents, to US$57.28 on the NYSE.
Trading was heavy on the NYSE, with about 1.79 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 2.22 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of 10 to 7 on the NYSE and by more than 3 to 2 on Nasdaq.
- REUTERS
NEW YORK - US stocks rallied on Wednesday as stronger-than-expected earnings and a positive outlook from Cisco Systems Inc. boosted sentiment, along with news that Pfizer Inc. may sell its consumer division.
Stocks ended near the day's highs, with the Dow industrials gaining 1 per cent in their biggest rise
AdvertisementAdvertise with NZME.