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Overnight Markets: S&P 500 extends record on durable goods data

by Himanshu Singh on May 28, 2014 at 03:43

Overnight Markets: S&P 500 extends record on durable goods data

Wall Street rose on Tuesday, with the Standard & Poor’s 500 Index extending a record, after durable goods orders unexpectedly increased and JBS SA offered to buy Hillshire Brands Co. for $6.4 billion.

The S&P 500 rallied for a fourth day, rising 0.6% to 1,912. The Dow Jones Industrial Average gained 69 points, or 0.4%, to 16,676. The Nasdaq Composite Index added 1.2% and the Russell 2000 Index jumped 1.4%.

Orders for durable goods surged for a third month in April, a sign US factories will help the world’s biggest economy strengthen. Bookings for goods meant to last at least three years increased 0.8% after a 3.6% gain in the prior month that was stronger than previously reported, Commerce Department figures showed.

Separately, the Conference Board’s index of US consumer confidence increased to 83 in May from 81.7 a month earlier. The S&P/Case-Shiller index of property prices in 20 US cities increased 12.4% from March 2013 after a 12.9% gain in the year ended in February.

European Central Bank President Mario Draghi signaled yesterday a readiness to act on low inflation, while China’s premier said he may fine-tune economic policy.

In deal news, Hillshire jumped 22% as JBS’s Pilgrim’s Pride Corp. unit made an unsolicited bid for the maker of Jimmy Dean sausages and Ball Park hot dogs.

Utility stocks also performed well after PJM Interconnection LLC, which runs the largest US power grid, said payments to electricity producers will more than double in the year starting June 2017 to ensure adequate generating capacity. FirstEnergy rallied 5.6%. Exelon increased 3.6% and NRG Energy advanced 4.7%.

Pfizer Inc. (PFE) added 0.4% after the largest US drugmaker yesterday stopped its attempt to buy AstraZeneca for $117 billion.

Financial sector also gained. Bank of America Corp. climbed 3.4% after resubmitting its capital plan to the Federal Reserve.

In the technology sector, Facebook Inc. jumped 3.5%, leading technology shares in the S&P 500 to a 1% gain, the most among 10 main industries.

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