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NEW YORK: US stocks rose modestly on Tuesday, lifted by gains overseas and as sentiment was buoyed by hopes that emergency government measures will pull the global economy out of recession.
The Dow Jones Industrial Average gained 62.21 points (0.69 percent) to close at 9,015.10, as Wall Street posted its fourth gain in the past five sessions.
The technology-heavy Nasdaq advanced 24.35 points (1.50 percent) to 1,652.38 and the broad-market Standard & Poor's 500 index added 7.25 points (0.78 percent) to 934.70.
The market shook off weak data on pending home sales, factory orders and service sector activity, apparently looking ahead to an economic recovery.
"Investors believe that stock prices already reflect weak economic growth and that a large stimulus package will revive the US economy," said Chris Lafakis at Moody's Economy.com.
Al Goldman at Wachovia Securities noted that the market "continues to look forward to benefits of a government stimulus package."
Other global markets were also mainly higher. In London, the FTSE 100 index of leading shares was up 1.29 percent to 4,638.92. Frankfurt's DAX gained 0.85 percent to 5,026.31 and the Paris CAC 40 index added 1.08 percent to 3,396.22.
The market remained focused on stimulus efforts in Washington.
US president-elect Barack Obama, who takes office on January 20, met with congressional leaders on Monday to discuss an estimated 775-billion-dollar stimulus plan, pressing for quick action in the face of a rapidly sinking economy.
Obama touted a sweetener of 300 billion dollars in tax cuts in an apparent bid for opposition Republican support.
John Wilson at Morgan Keegan said however the market appears to be banking on a rebound regardless of any stimulus plan.
"It is entirely possible that the market is in the process of discounting the future (a better economy) and that by the time the politicians act, the market may well have made their actions superfluous," he said.
The Federal Reserve meanwhile, in minutes from last month's policy meeting, indicated the US recession is likely to drag on well into 2009 with a "moderate recovery" in 2010.
The minutes from a December 15-16 Federal Open Market Committee (FOMC) meeting at which policymakers unanimously cut rates to near zero showed policymakers were faced with a grim economic forecast from its staff.
"The staff revised down sharply its outlook for economic activity in 2009 but continued to project a moderate recovery in 2010," the minutes stated.
Among stocks in focus, Dow Chemical soared 6.64 percent to 16.05 dollars. The company said it was preparing legal action against Kuwait's state-owned Petrochemicals Industries Co. for "breach of contract," for pulling out of a multibillion-dollar project.
Blue-chip financials were strong gainers: Bank of America climbed 2.15 percent to 14.28 dollars, Citigroup was up a hefty 5.37 percent at 7.46 and JPMorgan Chase won 2.15 percent to 29.88.
Tobacco giant Altria Group fell 1.50 percent to 15.15 dollars. The company announced on Tuesday it had completed its acquisition of UST, owner of smokeless tobacco brands Skoal and Copenhagen and a wine company, in a cash-and-debt deal worth 11.7 billion dollars.
The bond market extended Monday's losses. The yield on the 10-year Treasury rose to 2.505 percent from 2.488 percent on Monday while that on the 30-year bond climbed to 3.069 percent from 3.040 percent. Bond yields and prices move in opposite directions. - AFP/de
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