Wall Street buoyed after trade deficit narrows

Dow Jones: 12,124.36 (+75.42) Nasdaq: 2,684.87 (+9.49) S&P 500: 1,289.00 (+9.44)US STOCKS advanced yesterday, snapping a six-day decline, as the trade deficit unexpectedly narrowed amid record exports and consumer confidence improved.

The Morgan Stanley Cyclical Index of companies most tied to economic growth rose 1 per cent.

Mosaic and CF Industries paced gains among fertilizer producers, climbing at least 4.1 per cent, after the government reduced its corn-crop estimate.

American International rose 2.9 per cent as Deutsche Bank recommended buying the shares.

Brown-Forman added 2 per cent after the maker of Jack Daniel’s whiskey reported earnings that beat analysts’ estimates.

The Dow Jones industrial average rose 75.42 points, or 0.63 per cent, at 12,124.36.

The Standard & Poor’s 500 Index was up 9.44 points, or 0.74 per cent, at 1,289.00.

The Nasdaq Composite Index increased 9.49 points, or 0.35 per cent, at 2,684.87.

Texas Instruments shares rose 0.7 per cent to $32.91 after the company cut its earnings and revenue forecasts late on Wednesday.

Reflecting the appetite for tech stocks, shares of Fusion-io surged 18.4 per cent to $22.50 in their first day of trading – up from an initial public offering price of $19.

Earlier the stock was up as much as 34.2 per cent at a session high of $25.50.

“The stock market got oversold,” said James Dunigan, chief investment officer in Philadelphia for PNC Wealth Management.

“We’ve got some positive news against the string of poor economic data of the last few weeks. Earnings are still pretty strong. There’s value out there if you want to build a long-term position,” he said.

The S&P 500 yesterday completed its longest slump since February 2009 on concern the economy is slowing. A report last week showed that payrolls grew at the slowest pace in eight months.

The benchmark equity index doubled from its March 2009 low to 1,363.61 on April 29th, its highest level since June 5th, 2008, as earnings topped estimates for nine straight quarters.

Stocks rose yesterday as a report showed that the US trade deficit narrowed in April, reflecting a plunge in auto and oil imports combined with record exports. – (Bloomberg/Reuters)