US stocks rally despite General Motors bankruptcy filing

June 2nd, 2009 - 5:55 am ICT by IANS  

New York, June 2 (DPA) Wall Street’s major stock indices rallied Monday despite General Motors filing for bankruptcy, as strong manufacturing and construction reports raised hopes of a global economic recovery.
GM filed for bankruptcy after years of taking heavy losses, becoming the largest-ever US manufacturer to seek court protection.

The company’s existing shareholders have been virtually wiped out and GM was delisted from the Dow Jones Industrial Average Monday. Cisco Systems, the largest maker of networking equipment, is to take GM’s slot on the Dow.

But Wall Street was buoyed by a report that said while the manufacturing sector contracted in May, the rate of the slowdown was lower than expected. Caterpillar and Alcoa, the largest aluminium maker in the US, pushed the Dow up nearly 6 percent.

Construction spending was also up in April, according to a report from the Commerce Department, which said the 0.8-percent gain was the highest since last August.

The blue-chip Dow Jones Industrial Average added 221.11 points, or 2.60 percent, to 8,721.44, to its highest since January.

The broader Standard & Poor’s 500 Index gained 23.73 points, or 2.58 percent, to 942.87. The technology-heavy Nasdaq Composite Index rose 54.35 points, or 3.06 percent, to 1,828.68.

The US currency dropped against the euro to 70.59 euro cents from 70.632 euro cents Friday. The dollar rose against the Japanese currency to 96.43 yen from 95.34 yen Friday.

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