World Business

Wall St rises in relief over European debt auctions

(Agencies)
Updated: 2010-06-16 09:38

NEW YORK - US stocks advanced on Tuesday as multinationals climbed in sync with the euro after a number of successful European debt auctions eased investor concerns about the continent's solvency crisis.

Industrial and technology sectors, which have a large exposure to Europe, led the US market's advance. Aircraft manufacturer Boeing Co shot up 3.3 percent to $66.93, while heavy equipment maker Caterpillar Inc added 3 percent to $62.84.

The euro, used as a barometer to assess risk appetite, rose above $1.23 versus the dollar to its best level since June 3, even after a survey showed German investor sentiment fell more than expected.

"Euro equals market, market equals euro -- one or the other," said Stephen Massocca, a managing director of Wedbush Morgan in San Francisco.

"If people feel like it's OK to wade back into the risk pool here, then you need Europe to be OK for that to happen. And if Europe is OK, then the euro should probably go up."

The Dow Jones industrial average gained 126.82 points, or 1.24 percent, to 10,317.71. The Standard & Poor's 500 Index rose 14.32 points, or 1.31 percent, to 1,103.95. The Nasdaq Composite Index climbed 39.99 points, or 1.78 percent, to 2,283.95.

Spain, Belgium and Ireland sold government debt at auctions that attracted healthy demand, which soothed investor worries about the euro zone's debt crisis.

Semiconductor stocks also helped boost the tech sector and lift the Nasdaq after TSMC and UMC, the world's two largest contract chip makers, forecast chip demand growing in the coming months amid an improving global economy and rising sales of new PCs and other consumer gadgets.

The Philadelphia semiconductor index surged 3.9 percent.

Related readings:  Euro ministers add final stitch to debt safety net  Euro makes mark despite woes  Euro at 4-year lows while stocks drop on risk flight  Chinese exporters ditch wounded euro for dollars

Intel Corp, the world's dominant chip maker, gained 2.1 percent to $21.33. Broadcom Corp climbed 3.9 percent to $35.22 while Marvell Technology Group surged 6.2 percent to $18.58.

An S&P index of energy companies' stocks gained 2 percent, with the US-listed shares of BP plc up 2.8 percent at $31.54.

BP America President Lamar McKay said on Tuesday the company soon will have six ships to remove oil siphoned from its ruptured undersea well in the Gulf of Mexico.

The market's positive tone was enhanced by US data showing inflation remained in check.

New York state manufacturing continued to grow in June although employment fell sharply, while in a separate report, US import prices posted their largest drop in nearly a year in May, buttressing views that inflation is tame and interest rates are likely to stay low.

Airline stocks also climbed after Delta Air Lines (DAL.N) and American Airlines parent AMR Corp said second-quarter unit revenue would rise, aided by the improving economy and recovering business traffic.

Delta added 2.2 percent to $13.99 while AMR Corp advanced 2.8 percent to $8.69. The NYSE Arca Airline Index jumped 3.8 percent.

On the downside, US electronics retailer Best Buy Co dropped 6.5 percent to $38.37 after its quarterly profits missed estimates.