Optimism over economy helps lift Wall Street

Dow Jones:11,613.53 (+53.58) Nasdaq:2,579.46 (+3.35) S&P 500:1,218.89 (+5.97)

US STOCKS rose yesterday, giving the Standard and Poor’s 500 Index its best eight-day gain since 2009, as speculation the economy will keep expanding overshadowed a drop in ATT following a government antitrust lawsuit.

Ford Motor and Alcoa gained at least 2.5 per cent as companies most tied to economic growth rallied.

Joy Global jumped 1.5 per cent after the maker of mining equipment forecast more earnings than analysts estimated.

ATT fell 4.2 per cent, limiting the market’s gain, as the US government sued to prevent its planned purchase of T-Mobile USA, saying the deal would curb competition in the wireless market.

The S&P 500 climbed 0.5 per cent to 1,218.89 in New York after surging 1.5 per cent earlier.

The benchmark gauge for American equities is up 8.5 per cent since August 19th while still heading for its fourth straight monthly loss, the longest slump since March 2008.

The Dow Jones Industrial Average added 53.58 points, or 0.5 per cent, to 11,613.53, erasing its year-to-date decline.

“The stock market is poised for a rebound if data begins to be more encouraging,” Marshall Front, chairman of Front Barnett Associates LLC in Chicago, said.

“Stocks have gotten to a point where they are discounting a degree of slowness in the economy that is not likely to evolve,” he said.

Stocks advanced after reports showed US business activity and factory orders expanded at a faster pace than economists forecast.

US equities rose on Tuesday after the Federal Reserve said some policy makers wanted to take more action to stimulate the economy during their meeting this month.

Lions Gate Entertainment sank 7.5 per cent to $6.96. Billionaire Carl Icahn agreed to sell his Lions Gate shares for $7 each, roughly his cost, to end a battle for control over the independent film and television studio. The parties also agreed to end all litigation, according to a statement issued on Tuesday by Icahn and Lions Gate, the studio behind the Sawmovies and Mad MenTV show.

Verizon Communications fell 0.4 per cent to $36.17.

Sprint Nextel rose 5.9 per cent to $3.76. – (Bloomberg/Reuters)