Stocks Edge Higher On Hopes For IMF Cash Boost
NEW YORK (AP) — Wall Street edged higher Wednesday following reports that the International Monetary Fund could get more cash to help countries struggling to manage their debt.
Stocks got another push from a surprisingly strong report on the housing market. The National Association of Home Builders index rose to its highest level since June 2007 as sales jumped. Analysts said it could be a sign the housing market has bottomed out.
The Dow Jones industrial average rose 78 points at 12,560 as of 1 p.m. Eastern time. That's an increase of 0.6 percent.
"We think things are setting up to be better than last year," said Brad Sorensen, director of market research at Charles Schwab. Sorensen said the recent batch of better U.S. economic reports and moves by the European Central Bank have helped investors set aside some of their fears over Europe's debt crisis.
"The worst-case scenario is off the table," Sorensen said. "The story isn't as dire as people thought it was in the second half of last year."
Goldman Sachs Group Inc. jumped 6.5 percent after the investment bank reported earnings that trumped analysts' expectations. Profit still fell 58 percent in the last three months of 2011, a result of sinking interest rates and volatile financial markets.
Bank of America Corp. and JPMorgan Chase & Co. led the Dow higher. JPMorgan rose 4.4 percent, BofA 3.8 percent.
Other financial stocks were sharply lower. State Street Corp. plunged 6.4 percent, the largest fall in the S&P 500 index. PNC Financial Services Group Inc. fell 2.3 percent and Northern Trust Corp. slipped 2.2 percent. All three reported earnings Wednesday that missed analysts' estimates.
Christine Lagarde, the IMF's managing director, said Tuesday that the fund was looking at ways to raise another $500 billion to lend to countries. The IMF has put up roughly a third of the money given as rescue loans to European countries struggling with debt payments over the past two years.
In other trading, the S&P 500 index added 10 points to 1,304. The Nasdaq rose 32 points, or 1.2 percent, to 2,760.
Yahoo Inc. rose 2.8 percent on news that co-founder Jerry Yang is leaving the struggling Internet company. The departure clears the way for newly hired CEO Scott Thompson to take more radical action to shake up the company.
The Federal Reserve said manufacturing rose 0.9 percent in December, the biggest increase since December 2010. Output surged as companies bought more machines and materials.
Among other stocks making large moves Wednesday:
__ Amphenol Corp. soared 10.3 percent. The manufacturer of fiber-optic cables reported earnings that beat analysts' expectations and said strong orders should push next year's earnings above Wall Street's current forecasts.
__ Linear Technology Corp. jumped 10.8 percent, the largest gain in the S&P 500. The Milpitas, Calif.-based circuit maker said it expects revenue to rise between 4 and 8 percent in its third quarter following strong order increases in December and January. It also raised its dividend by a penny to 25 cents per share.
__ Cash America International Inc. sank 7.6 percent after the payday lender and pawnshop operator cut its earnings forecast.