June 6 (Bloomberg) -- U.S. stocks rose for a third week, almost erasing the Dow Jones Industrial Average’s 2009 loss, on further signs the economy is improving.
Boeing Co. and Caterpillar Inc. climbed at least 8.5 percent, leading industrial shares to the steepest advance among 10 industries in the Standard & Poor’s 500 Index, after reports on personal income, manufacturing and construction beat economists’ predictions. Alcoa Inc. increased the most in the Dow average, advancing 19 percent, as metals gained on speculation demand is improving.
“We may be seeing a winding down of the recessionary period,” said Walter Gerasimowicz, the New York-based chief executive officer at Meditron Asset Management, which oversees $1.1 billion. “The market is pricing in that we’re returning to growth and the recession has bottomed.”
The S&P 500 climbed 2.3 percent to 940.09. The Dow added 262.80 points, or 3.1 percent, to 8,763.13. The measure, which fell 25 percent between Dec. 31 and March 9, now must add 0.2 percent to be up in 2009. The S&P 500 has been up for the year since May. The Russell 2000 Index of small companies advanced 5.7 percent.
The S&P 500 has climbed 39 percent from a 12-year low on March 9 as the U.S. government and the Federal Reserve pledged $12.8 trillion to end the recession and the nation’s three largest banks said they made money at the start of the year. The benchmark equity index reached a value of 15.4 times the earnings of its companies on June 2, the most expensive level since October yet lower than the 19.8 monthly average during the past decade.
Average Price
The S&P 500 closed above its average price over the past 200 days for the first time since December 2007 on June 1, a bullish signal to so-called technical analysts who study charts to predict market trends. more...
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