Wall Street stocks gain amid optimism about US economy

US REPORTat noon: Dow Jones:10,977.17 (+50.10) S&P 500:1,187.18 (+9.08) Nasdaq:2,426.23 (+23.65)

US STOCKS rose yesterday, with the Standard and Poor’s 500 Index climbing to an 18-month high, as the biggest increase in jobs in three years and growth in service industries and home sales boosted optimism about the US economy.

Caterpillar, American Express and General Electric helped lead gains that also sent the Dow Jones Industrial Average to the highest level since September 2008.

Apple advanced 0.7 per cent to $237.60 after saying it sold 300,000 iPads on the device’s first day of availability.

ConocoPhillips climbed 2 per cent to $53.07, while Exxon Mobil added 0.9 per cent to $68.21 as crude oil reached its highest price in 17 months.

“What we’ve got with this jobs number is a very robust confirmation of something we’ve been talking about since the third quarter of 2009 – and that’s a global economic expansion,” said Stephen Wood of Russell Investments in New York.

“This is probably one of the final pieces of confirming data, and stocks are benefiting.”

US payrolls rose by 162,000 last month, less than forecast, after a revised 14,000 decrease in February that was smaller than initially estimated, figures from the US labour department showed on April 2nd.

The March increase included 48,000 temporary workers hired by the US government to help conduct the 2010 census. The unemployment rate held at 9.7 per cent.

Other reports showed faster-than-estimated growth in service industries and an unexpected increase in pending US home sales.

The Institute for Supply Management’s index of non-manufacturing businesses, which make up about 90 per cent of the economy, rose to 55.4, higher than the median forecast in a Bloomberg News survey and the fastest growth in more than three years.

The National Association of Realtors’ index of purchase agreements, or pending home sales, rose 8.2 per cent, the second-biggest gain on record, in a sign that government efforts to support the market will start to pay off.

“This environment of continued improvement in the economy, combined with still low interest rates and improving corporate profits, represents a sort of ‘sweet spot’ for risk assets,” said Bob Doll, vice-chairman and global chief investment officer for equities at New York-based BlackRock. – (Bloomberg)