Wall Street rises, bolstered by financial, energy stocks

May 29th, 2009 - 4:13 am ICT by IANS  

New York, May 29 (Xinhua) The Wall Street closed higher Thursday, led by energy and banking shares.
J.P. Morgan Chase & Co. and American Express Co. led gains in the Dow Jones Industrial Average, as the benchmark 10-year note climbed, sending its yield lower for the first time in five days.

Energy stocks gained momentum and climbed strongly, as oil topped $65 a barrel on the New York Mercantile Exchange, after OPEC predicted a recovery in demand.

In economic data, the US Commerce Department said orders for durable goods rose by 1.9 percent in April, more than four times the 0.4 percent increase that had been expected.

Meanwhile, the US Labour Department reported that the number of initial claims for unemployment insurance dropped to a seasonally adjusted 623,000 last week. However, the figure was below analysts’ expectations of 635,000. But the number of people continuing to receive unemployment benefits rose to a new record.

Negative housing data hit homebuilders. The Commerce Department said new home sales rose 0.3 percent in April, worse than expected 1.1 percent increase.

Moreover, the Mortgage Bankers Association said the US delinquency rate jumped to a seasonally adjusted 9.12 percent and the share of loans entering foreclosure rose to 1.37 percent. Both figures are the highest in records going back to 1972.

In corporate news, General Motors (GM), biggest US automaker, reached an amended debt-for-equity deal with bondholders. Accordingly, GM bondholders will start with 10 percent equity, with 7.5 percent more when the company’s market cap reaches $15 billion and $30 billion. However, it might still not spare the company from bankruptcy.

The Dow Jones rose 103.78, or 1.25 percent, to 8,403.80. Broader indexes also moved higher. The Standard & Poor’s 500 index rose 13.77, or 1.54 percent, to 906.83; and the Nasdaq rose 20.71, or 1.20 percent, to 1,751.79.

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