US stocks: Shares gain as industrials rally

US stocks rose on Friday, capping a week of solid gains, as investors bought shares of industrial companies like Caterpillar Inc. and United Technologies Corp. after a government report signaled strength in the sector.

The S&P 500 index registered its sixth straight gain, its longest winning streak since November, and all three major indexes ended near 5-year highs.

A Federal Reserve report showed output from US factories, mines and utilities rose 0.7 per cent in February. ID:nN17113704

"The market is getting confirmation that this economy is stronger than it had thought, and the general industrials reflect that," said Milton Ezrati, senior economic strategist at Lord Abbett & Co.

The Dow Jones industrial average ended up 26.41 points, or 0.23 per cent, at 11,279.65. The Standard & Poor's 500 Indexgained 1.92 points, or 0.15 per cent, to 1,307.25. The Nasdaq Composite Index was up 6.92 points, or 0.30 per cent, at 2,306.48.

For the week, the Dow rose 1.84 per cent, the Nasdaq gained 1.96 per cent and the S&P 500 advanced 2 per cent.

The Dow registered its best weekly gains in nearly a month, while the S&P and Nasdaq had their best weekly performances since January.

Declines in Dow components General Motors Corp. and American International Group Inc. limited a broad market advance.

Trading was choppy as investors adjusted portfolios for the expiration of March futures and options, known as quadruple witching, fund managers said.

Even though much of February's increased output came from a weather-related boost in utility demand, analysts said the Fed data enhanced the appeal of large-cap stocks.

Heavy equipment maker Caterpillar shares rose 1.8 per cent, or US$1.33, to US$76.23 on the New York Stock Exchange, while shares of aerospace and industrial conglomerate United Technologies gained 1 per cent, or 57 cents, to US$58.80.

Caterpillar shares hit a record high of US$76.30. Shares of fellow Dow component Boeing Co. rose 1.5 per cent, or US$1.12, to US$77.85 after hitting a record high of US$78.08.

GM shares slid 4.9 per cent, or US$1.09, to US$21.13 after it reported its 2005 loss was US$2 billion deeper than previously reported. ID:nN16147191

Shares of AIG, the world's largest insurer by market value, fell 0.6 per cent, or 42 cents, to US$68.82 after the company posted a 72 per cent drop in fourth-quarter profit. ID:nN16355547

Among the day's gainers, shares of Genentech Inc. rose 6.7 per cent, or US$5.55, to US$88.14 after the biotech company raised its current year and five-year earnings growth forecasts. ID:nN17405469

On the Nasdaq, shares of Sirius Satellite Radio Inc. rose 8.4 per cent, or 38 cents, to US$4.89 after the company said it will be the exclusive provider of the pay-radio service to automaker Volkswagen AG's namesake brand and its premium Audi AG affiliate. ID:nN17389943

Trading was heavy on the NYSE, with about 2 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 2.56 billion shares traded, above last year's daily average of 1.80 billion.

Advancing stocks outnumbered declines by a ratio of 9 to 7 on the NYSE and by 8 to 7 on Nasdaq.

- REUTERS