USA: Wall Street lifted by defensive stocks, pushing the Dow Jones into positive territory for the first time since January
Record ID:
186920
USA: Wall Street lifted by defensive stocks, pushing the Dow Jones into positive territory for the first time since January
- Title: USA: Wall Street lifted by defensive stocks, pushing the Dow Jones into positive territory for the first time since January
- Date: 13th June 2009
- Summary: NEWPORT BEACH, CALIFORNIA, UNITED STATES (JUNE 12, 2009) (REUTERS) (SOUNDBITE) (English) MOHAMED EL ERIAN, PIMCO CEO, SAYING: "We're very encouraged. If you look at the story of the last few months, it's been about the healing of the financial sector. We are starting to see more normal behaviour. It's not fully normal behaviour yet because there's still a lot of supports. So if you like, the financial sector has come out of the ICU and is now back in a hospital room. It doesn't mean it's back to being able to do what it did before, but it's certainly no longer in the critical stage."
- Embargoed: 28th June 2009 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Finance
- Reuters ID: LVA198ATQ924DGHMTG0I2SH8GGEN
- Story Text: The Dow moved into positive territory for the year for the first time since early January on Friday (June 12), lifted by defensive sectors like pharmaceuticals while a disappointing outlook from National Semiconductor weighed on technology stocks.
The healthcare sector rose as investors rotated money into defensive plays, which pushed the S&P 500 to a seven-month high. The AMEX Pharmaceutical index gained 1.2 percent.
Defensive plays are stocks of companies that tend to weather a recession better than others because their products -- such as food or toothpaste or drugs -- are things that people buy, even if they cut spending, in leaner times.
Procter & Gamble Co rose 1 percent to 52.55 dollars (USD).
But technology shares weighed on the Nasdaq after chipmaker National Semiconductor Corp posted quarterly results and gave an outlook that topped Wall Street's estimates, but the guidance fell short in comparison to an outlook earlier this week from fellow chipmaker Texas Instruments.
National Semi's shares slumped 6.1 percent to 13.59 dollars (USD) while the PHLX semiconductor index, slid 1.8 percent.
The S&P has risen 39.8 percent since hitting a 12-year closing low on March 9, leading some analysts to believe a pullback is in the offing.
"We're very encouraged. If you look at the story of the last few months, it's been about the healing of the financial sector. We are starting to see more normal behaviour. It's not fully normal behaviour yet because there's still a lot of supports. So if you like, the financial sector has come out of the ICU and is now back in a hospital room. It doesn't mean it's back to being able to do what it did before, but it's certainly no longer in the critical stage," said Pimco CEO Mohamed El-Erian.
The Dow Jones industrial average gained 28.34 points, or 0.32 percent, to 8,799.26. The Standard & Poor's 500 Index gained 1.32 points, or 0.14 percent, to 946.21. The Nasdaq Composite Index dropped 3.57 points, or 0.19 percent, to 1,858.80.
For the week, the Dow gained 0.4 percent, the S&P 500 added 0.7 percent and the Nasdaq rose 0.5 percent.
For the year, the blue-chip Dow average is up 0.26 percent.
Other defensives such as utilities also rose, with FirstEnergy Corp rising 3.6 percent to 40.48 dollars (USD). The S&P Utilities index advanced 1.4 percent.
Among the tech bellwethers, iPod and iPhone maker Apple Inc shed 2.1 percent to 136.97 dollars (USD) and BlackBerry maker Research in Motion fell 2.8 percent to 83.02 dollars (USD). They were the top two drags on the Nasdaq.
The Reuters/University of Michigan Surveys of Consumers showed consumers' mood in June stood at its highest in nine months, but worries about inflation and labor market uncertainty persisted.
Shortly before midday, the New York Stock Exchange was hit by a technical glitch that temporarily halted trading in about 240 stocks, including blue-chips General Electric, Exxon Mobil and Bank of America. Server connectivity was restored around 1610 GMT.
Trading volume was low on the New York Stock Exchange, with only about 857 million shares changing hands, sharply below last year's estimated daily average of 1.49 billion, while on Nasdaq, about 2.05 billion shares traded, below last year's daily average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by 1,623 to 1,369 while on the Nasdaq, decliners beat advancers by 1,442 to 1,236. - Copyright Holder: REUTERS
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