11:45 AM New York – Stocks on Wall Street extended gains on economic optimism. The narrow and legacy Dow Jones Industrial average surpassed previous intraday record in 2007. Service industry index gained at a fastest pace in a year.
Stocks in New York advanced and the narrow of index of large companies traded at a new intraday high.
Market optimism was driven by the latest news that China is ready to pump more money to revive the economic growth and set annual economic growth target of 7.5% for 2013 ahead of its annual leadership meeting.
The Dow Jones Industrial average surpassed the intraday high 14,198.10 set on October 11, 2007.
Investors overlooked the protracted and divisive tone of budget negotiations in Washington and focused on earnings. Large companies have generally exceeded lowered earnings expectations in the latest earnings season.
The broader and more widely followed index of 500 stocks tabulated by Standard & Poor’s 500 was also inching higher towards its record high.
After long five years, market indexes have recovered from the near 50% plunge that began in 2008 when the economy declined in final quarter of the year at an annual pace of more than 8%.
The dollar held its ground against the euro and traded near $1.302.
In addition, the service industry expanded at the fastest pace in a year. The Institute for Supply Management’s non-manufacturing index increased to 56 in February from 55.2 in January.
The ISM noted in its press release that thirteen service sector industries including real estate, retail, finance and transportation reported growth in the month.
In Europe, market indexes in London gained 1.3% and in Frankfurt soared 2.2% and in Paris advanced 2%.
In Asia, the Nikkei gained 0.3% but the broader Topix index declined 0.4% and halted a 3-day rally as investors feared that the latest advance of more than 35% in the last five months may have stretched prices.
Hong Kong index gained 0.1% ahead of annual meeting of political leaders in Beijing and markets in Mumbai surged on the Asian rally.
Stocks in Review
Ascena Retail Group, Inc.
) surged 11.4% or $1.89 to $18.42 after the specialty retailer stated net sales in the second quarter ending on January 26 climbed 54% to $662.1 million from $477.3 million. Comparable sales in the quarter increased 2%.
Net income in the quarter declined 7% to $47.2 million or 29 cents a diluted share compared to $63.7 million or 40 cents a share a year ago period.
The company reaffirmed adjusted earnings per diluted share from continuing operations for the fiscal year in the range of $1.20 to $1.30.
) increased 7% to $51.95 and trading volume jumped to three times daily average.
J.C. Penney Company, Inc
) plunged 10% to $15.08 after the second largest stockholder sold half of its stake in the retailer according to media reports.
) gained 2% after the chipmakers for cell phones increased its quarterly dividend to 40 cents a share. The company board also approved a new $5 billion of stock repurchase program replacing the previous $4 billion program which had $2.5 billion of unused authority.