US stocks rise on strong US industrial output
Trader Greg Mulligan works on the floor of the New York Stock Exchange Monday, Dec. 16, 2013. The stock market is opening sharply higher after a pair of multibillion-dollar deals and signs of strength in U.S. manufacturing. (AP Photo/Richard Drew)
NEW YORK—US stocks Monday jumped following a strong report on US industrial output that came a day before a much-anticipated US Federal Reserve policy meeting.
The Dow Jones Industrial Average rose 129.21 points (0.82 percent) to 15,884.57.
The broad-based S&P 500 gained 11.22 (0.63 percent) at 1,786.54, while the tech-rich Nasdaq Composite Index rose 28.54 (0.71 percent) to 4,029.52.
US industrial output surged 1.1 percent in November, the Federal Reserve reported, with manufacturing showing a fourth consecutive monthly gain.
The strong industrial output report came ahead of a two-day meeting of the Fed’s monetary policy committee. The Fed will weigh whether the economy is strong enough to cut back its $85 billion a month stimulus program.
Article continues after this advertisementBill Lynch, director of investment at Hinsdale Associates, said stocks were well positioned for a rally after the S&P 500 lost 1.7 percent last week.
Article continues after this advertisement“Maybe the market used this as an opportunity for investors who are underweight equities to add to their positions,” Lynch said.
Insurer AIG advanced 1.1 percent after announcing the sale of its aircraft leasing unit International Lease Finance Corp. to AerCap of the Netherlands for $5.4 billion.
AerCap surged 33.1 percent on the announcement, which will see it become the world’s largest aviation lease firm.
Semiconductor company Avago Technologies jumped 9.8 percent after announcing a deal to acquire LSI Corp. for $6.6 billion. LSI rose 38.6 percent.
Dow component ExxonMobil rose 2.0 percent after Goldman Sachs upgraded the stock to “buy” from “neutral.” Exxon looks “inexpensive” compared to its historic valuation and the company’s production outlook has improved, Goldman said.
Google tacked on 1.2 percent after industry tracker eMarketer said its YouTube unit will garner $5.6 billion in ads this year. Separately, Google bought robot developer Boston Dynamics, according to a person familiar with the matter.
Social media site Twitter fell 4.1 percent following downgrades from Wells Fargo and SunTrust Robinson Humphries. Wells Fargo said user engagement is not as great as advertisers may desire. SunTrust called the company’s valuation “stretched,” according to Barrons.com.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.88 percent from 2.87 percent, while the 30-year increased to 3.90 percent from 3.87 percent. Bond prices and yields move inversely.
