Dow Jones: 12,626.02 (+56.15) S&P 500: 1,339.22 (+1.34) Nasdaq: 2,834.02 (+8.25)TRANSPORTATION STOCKS were among the standouts in another flat session for US equities yesterday and the sector's rally could be cause for optimism ahead.
Broader gains were limited as a downgrade of Portugal’s credit rating weighed on banking shares, while a rate hike in China was another concern for investors. However, the Nasdaq rose for its seventh straight day, extending its rally to 6.8 per cent.
The Dow Jones Transportation Average rose 1.2 per cent and hit a new closing high at 5,566.07. The gains were led by Con-Way, which added 5.7 per cent to $41.87 after the US trucking company said it was restoring some employee benefits because the economy had improved.
Transports are considered a barometer for economic activity because shipping activity signals demand for goods. FedEx advanced 1.3 per cent to $96.78 while Union Pacific hit an all-time high, rising 0.8 per cent to $106.59.
Moody’s downgrade of Portugal’s credit rating to “junk” cast new doubt on European efforts to rescue distressed euro-zone states without debt restructuring.
Banks were among the worst performers on concerns about their exposure to euro-zone debt and sluggish US growth. The KBW Bank Index fell 0.7 per cent, withBank of America, the Dow’s biggest loser, down 2.4 per cent at $10.74. Gains were also limited by a softer than expected survey on US services sector growth, which slowed slightly in June. The data gave investors little reason to make big bets after last weeks rally drove the SP 500 up 5.6 per cent.
Michael McGervey, president of McGervey Wealth Management in North Canton, Ohio, said the 1,345 level was serving as resistance for the SP 500, referring to a recent high on the index, reached at the start of June.
The Dow was led higher by Caterpillar, which gained 1.5 per cent to $110.08, and Intel, up 1.4 per cent at $22.75.
China’s central bank increased interest rates for the third time this year, making clear that taming inflation is a top priority as its economy slows gently.
Volume was extremely light, with about 5.98 billion shares traded on the New York Stock Exchange. – (Reuters)
