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US close: Stocks rally amid positivity from Boeing, Brexit

By Josh White

Date: Thursday 14 Mar 2019

US close: Stocks rally amid positivity from Boeing, Brexit

(Sharecast News) - US stocks finished in the green on Wednesday, as investors digested a slew of data releases, with Boeing shares regaining some poise.
The Dow Jones Industrial Average was ahead 0.58% at 25,702.89, the S&P 500 added 0.69% to end the session at 2,810.92, and the Nasdaq 100 was up 0.77% to close at 7,256.98.

In macroeconomic news, US factory gate prices for February came in slightly below forecasts.

According to the Bureau of Labor Statistics, so-called total final demand prices increased at a 0.1% month-on-month pace last month versus consensus expectations of 0.2% as goods prices bounced back by 0.4% versus January while those in services were unchanged.

In January, goods prices had risen by 0.8% and those for services by 0.3%.

Compared to a year ago, the rate of increase in total final demand prices was unchanged at 1.9%, as expected by economists.

Elsewhere, data from the Department of Commerce showed that total durable goods orders grew at a 0.4% month-on-month clip in January to reach $255.3bn.

December's reading was revised higher too, to show growth of 1.3%.

Economists had anticipated a drop of 0.8% following a preliminary reading for December of 1.0%.

Meanwhile, other figures from the Commerce Department revealed that construction spending rose 1.3% in January compared to a 0.8% decline the moth before, marking the biggest increase since last April and beating expectations for 0.4% jump.

Investors were also cheering news from across the pond late in the session, as MPs voted against the prospect of a no-deal Brexit, a day after UK Prime Minister Theresa May's Brexit plan was voted down in the Commons again.

Given politicians rejected a no-deal Brexit, there would now be another vote on Thursday on whether to delay the whole process by extending Article 50.

On the corporate front, Boeing was 0.46% higher following heavy losses earlier in the week in the aftermath of the fatal Ethiopian Airlines crash.

"The decision by the various aviation authorities of China, Australia, Singapore, the UK and a number of EU aviation authorities speaks to a haemorrhaging of confidence in the safety of the aircraft which makes it all the more puzzling that the Federal Aviation Authority (FAA) is digging its heels in by saying it has full confidence in the safety of the aircraft, raising the prospect that politics could be playing a part," said CMC Markets analyst Michael Hewson earlier in the session.

"It still remains unclear as to why the two aircraft crashed in the way that it did, but it does remain puzzling that the FAA should be so dogmatic, when a respected body like the UK's Civil Aviation Authority bans the overflight of all 737 MAX 8 models over UK airspace, due to concerns over safety.

"Some US lawmakers are already expressing disquiet over the FAA's stubbornness, which to some extent is moot given that it is pretty much banned from flying anywhere in Europe and Asia, as things stand now, but nonetheless the reluctance of the FAA to act does raise questions as to why it insists on standing apart from its peers in the rest of the world."

Shares in Rite Aid ended the session up 6.1% after the drugstore chain announced the departure of its chief executive officer alongside a company shake-up that will see it slash about 400 jobs.

Oaktree Capital surged 12.34% after Canadian alternative investment group Brookfield Asset Management agreed to buy a 62% stake in the company for either $49 in cash per share or 1.0770 class A Brookfield shares.

That represented a 12.4% premium to the closing price of Oaktree shares on Tuesday.

Elsewhere, Vera Bradley rocketed 21.82% as its fourth-quarter earnings topped expectations and the luggage and handbag company's guidance was better-than-expected.

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