A turnaround in personal spending and a flurry of acquisition activity sent stocks higher Monday, but it wasn't enough to salvage a topsy-turvy...
NEW YORK — A turnaround in personal spending and a flurry of acquisition activity sent stocks higher Monday, but it wasn’t enough to salvage a topsy-turvy month. The major indexes fell in October.
The Dow Jones industrial average rose 37.30 to 10,440.07, after adding as much as 83 points late in the session.
Microsoft, one of the 30 Dow stocks, added 17 cents to close at $25.70 a share. Boeing, also a Dow stock, declined $1 to $64.64.
Broader stock indicators were also higher. The Standard & Poor’s 500 index was up 8.60 at 1,207.01, and the Nasdaq composite index surged 30.42 to 2,120.30.
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A Commerce Department report showing spending rose 0.5 percent in September — reversing a 0.5 percent decline the month before — came as another sign of the economy’s resilience following hurricanes Katrina and Rita. Last week, the department reported better-than-expected 3.8 percent gross domestic product growth for the July-September quarter.
While the upswing in spending bolstered the retail and technology sectors, Steven Goldman, chief market strategist at Weeden, also linked Monday’s rally to a broad recovery from last week’s lows and typical end-of-the-month trading as hedge funds and mutual funds try to boost returns. He also cited strong gains in the European markets.
“Basically, we had market sentiment get a bit too one-sided,” Goldman said about recent down days on Wall Street. “Stocks were getting in place to rebound.”
Wall Street finished October lower despite back-to-back trading days of sharp gains, closing out an erratic month when investors sold stocks on seemingly any data hinting at a slowing economy or a whiff of inflation. On Friday, the Dow climbed almost 173 points, its biggest one-day leap since late April.
For the month, the Dow fell 1.2 percent, the Nasdaq lost 1.5 percent, and the S&P 500 was lower by 1.8 percent.
Concerns about rising interest rates have haunted the market in recent weeks, with some afraid that the Federal Reserve will push rates too high and send the economy sliding. Although there is little doubt the Fed will lift rates a quarter-percentage point at its meeting today, analysts say changes to its policy language could move the market.
“A lot of people are looking for the traditional November rally,” said Rick Pendergraft, an equity trader at Schaeffer’s Investment Research. “The more people look for it, the more concerned I am it won’t happen. Any info not expected out of the Fed … could quickly halt the rally.”
Crude oil eased after the Organization of Petroleum Exporting Countries said it has enough spare capacity to cover an expected rise in demand this winter. A barrel of light crude dropped $1.46 to $59.76 on the New York Mercantile Exchange.
An unexpected gain in the Chicago Purchasing Managers’ Index also helped fuel the market’s momentum, with the index — a measure of manufacturing activity — climbing to 62.9 from September’s reading of 60.5. Economists were looking for a decline to 57.4.