Small cap rally still going
The Russell 2000 (NYSE: IWM) is posting solid gains as investors react to upbeat news about personal spending and a major corporation. At 2:58 p.m. ET, the small-cap index had climbed 15.72 points, or 2.05%, to 783.26. The Dow Jones Industrial Average (INDU) was up 213.14 points, or 1.61%, to 13,458.78.
The bulls are looking strong this afternoon as stocks are buoyed by news of stronger-than-expected personal spending and calming developments at a major financial player.
Personal spending climbed 1.1% in November, the U.S. Commerce Department reported before the start of trading. The increase, the biggest in over three years, calmed fears that Americans will spend less this holiday season due to falling home prices and higher energy costs.
Economists were expecting spending to increase 0.7% after a rise of 0.2% in October.
The same government report showed that personal income in November rose 0.4%, above October’s 0.2% increase. However, economists were forecasting a 0.5% climb.
The numbers tell us that consumers responded favorably to holiday discounts offered by retailers.
In corporate news, there’s speculation that Merrill Lynch (NYSE: MER) could sell a stake of itself for a $5 billion cash injection from Singapore’s state investment company.
That’s not a surprising move, since many other financial services giants have also sold stakes in order to secure much needed capital to deal with the consequences of the meltdown in the subprime mortgage sector.
Elsewhere, the price of oil has increased $2.29 to $93.35.
The bulls are looking strong this afternoon as stocks are buoyed by news of stronger-than-expected personal spending and calming developments at a major financial player.
Personal spending climbed 1.1% in November, the U.S. Commerce Department reported before the start of trading. The increase, the biggest in over three years, calmed fears that Americans will spend less this holiday season due to falling home prices and higher energy costs.
Economists were expecting spending to increase 0.7% after a rise of 0.2% in October.
The same government report showed that personal income in November rose 0.4%, above October’s 0.2% increase. However, economists were forecasting a 0.5% climb.
The numbers tell us that consumers responded favorably to holiday discounts offered by retailers.
In corporate news, there’s speculation that Merrill Lynch (NYSE: MER) could sell a stake of itself for a $5 billion cash injection from Singapore’s state investment company.
That’s not a surprising move, since many other financial services giants have also sold stakes in order to secure much needed capital to deal with the consequences of the meltdown in the subprime mortgage sector.
Elsewhere, the price of oil has increased $2.29 to $93.35.
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