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Wall Street rallies despite eroding consumer confidence

Business Materials 27 February 2008 02:58 (UTC +04:00)

( dpa ) - Major US stock indices were higher Tuesday after International Business Machines (IBM) Corp announced a huge buyback of shares.

Wall Street shook off a a sharp drop Tuesday in the Conference Board's index of consumer confidence, when IBM declared its plans to buy back 15 billion dollars in its own shares, suggesting confidence in the technology sector and its own cash flow this year. IBM is the world's largest computer-services company, making it a bellwether for corporate financial health.

Shares in the retailing sector also jumped Tuesday amid strong earnings reports from department-store chains.

"While the consumer is stretched, one of the factors that's very positive is that the corporate balance sheet is still in relatively good shape," Russ Koesterich, a money manager at Barclays Global Investors, told Bloomberg Radio.

The blue-chip Dow Jones Industrial Average rose 114.7 points, or 0.91 per cent, to 12,684.92 points. The broader Standard & Poor's 500 Index added 9.49 points, or 0.69 per cent, to 1,381.29. The technology-heavy Nasdaq Composite Index gained 17.51 points, or 0.75 per cent, to 2,344.99.

The US currency dropped against the euro to 66.756 euro cents from 67.43 euro cents on Monday. The dollar fell against the Japanese currency to 107.29 yen from 108.02 yen on Monday.

Gold rose 8.40 dollars to 948.90 dollars per fine ounce.

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