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Stocks Rally as Consumer Spending Tops Estimates, AIG Sells Asian Unit for $35.5 Billion

Strategic Insights

— 1 min read

U.S. stocks surged to their best level since 2007, erasing the 2010 loss for the Standard & Poor's 500 Index, after a stronger-than-forecast increase in consumer spending and the announcement of AIG's $35.5 billion sale of its Asian unit. The rally was led by consumer companies, with Walt Disney Co. pacing gains, as the Commerce Department reported a 0.5% rise in personal spending for a fourth consecutive month. The manufacturing sector also showed signs of growth, with the Institute for Supply Management's manufacturing gauge slipping to 56.5 in February, but remaining above the 50-point threshold that signals expansion.

Key Takeaways:

  • The Standard & Poor's 500 Index rallied 1% to 1,115.71, erasing the 2010 loss and reaching its best level since 2007.
  • AIG surged 4.1% after announcing the sale of its Asian unit, AIA Group Ltd., to Prudential Plc for $35.5 billion.
  • The Commerce Department reported a 0.5% increase in personal spending for a fourth consecutive month, a figure that exceeded economists' estimates.
  • Walt Disney Co. paced gains in consumer companies, rising 2.1% as the sector benefited from the stronger-than-forecast spending data.
  • Intel Corp. led technology shares higher, climbing 1.8% after global chip sales rose.
  • The Dow Jones Industrial Average climbed 78.53 points, or 0.8%, to 10,403.79.
  • More than five stocks advanced for each that fell on the New York Stock Exchange.

Statistics:

  • The Standard & Poor's 500 Index advanced 1% to 1,115.71 at 4:12 pm in New York.
  • The Dow Jones Industrial Average climbed 78.53 points, or 0.8%, to 10,403.79.
  • The Commerce Department reported a 0.5% increase in personal spending for a fourth consecutive month.
  • Global chip sales rose, contributing to Intel Corp.'s 1.8% gain.
  • The Institute for Supply Management's manufacturing gauge slipped to 56.5 in February, but remained above the 50-point threshold that signals expansion.

Sources:

  • Euclid Infotech Pvt. Ltd.
  • Syndigate.info an Albawaba.com company

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