Newspaper article THE JOURNAL RECORD

Stocks Increase for Second Day

Newspaper article THE JOURNAL RECORD

Stocks Increase for Second Day

Article excerpt

NEW YORK (Bloomberg) -- U.S. stocks rose Wednesday for a second day as investors snapped up shares of McDonald's, PepsiCo and other consumer businesses with dependable earnings.

The Dow Jones industrial average surged 116.83 to 9,171.48, bringing its gain for the year to 16 percent. The Standard & Poor's 500 Index gained 9.54 to 1,119.06 and is up 15 percent this year. The Nasdaq Composite Index fell 14.11 to 1,831.76.

"The giant gains in the market this year are causing some people to rethink how much higher prices can possibly go, so you're seeing a move into the more tried-and-true companies that investors can have more faith in terms of predictable earnings," said Chet Needelman, chief executive of Palley-Needelman Asset Management, which oversees $4.5 billion. U.S. bonds rose, pushing yields to one-month lows, after a report showing the widest trade deficit in six years suggested Asia's financial troubles will help curb U.S. inflation. The benchmark 30- year Treasury bond rose 18/32, or $5.63 per $1,000 bond, pushing its yield down 4 basis points to 5.89 percent, the lowest since April 17. The dollar fell to 1.7699 marks in late New York trading from 1.7830 Tuesday and to 135.97 yen from 136.26. McDonald's was the Dow's biggest gainer, rallying 3 1/16 to 65 7/8, after Chief Executive Jack Greenberg said late Tuesday he expects the world's largest restaurant company to have a "very strong" second quarter, partly because of a "strong improvement" in U.S. sales. PepsiCo rallied 2 9/16 to 40 1/2 on optimism that its soda business will return to double-digit profit growth next year. The strategy by money managers to reduce their risk in the face of the stock rally this year came at the expense of Intel, Microsoft and other computer-related stocks. Cut-throat competition in the technology industry may cause earnings to suffer as the year wears on, analysts said. …

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