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Bullish analyst comments on the aluminum giant and a delay on a new tax on health insurers lifted market sentiment Monday
By Lynn Thomasson
Dec. 21 (Bloomberg) -- U.S. stocks rose, erasing last week's loss, as analysts recommended companies from Alcoa (AA) to Intel Corp. (INTC) and health-care shares surged after Congress delayed a new tax by a year in the proposed industry overhaul.
Alcoa rallied 7.9 percent after Morgan Stanley lifted the largest U.S. aluminum producer to "overweight" on speculation metal prices will keep rallying. Intel Corp. added 2.3 percent as Barclays Plc analysts said shares of the world's biggest computer-chip maker are cheap. Cigna Corp. (CI) and Aetna Inc. (AET) advanced at least 3.8 percent as legislation calling for the most sweeping overhaul of the U.S. health-care system in more than four decades survived a crucial test vote.
The Standard & Poor's 500 Index added 1.1 percent to 1,114.07 at 4:01 p.m. in New York for the biggest gain in three weeks. The Dow Jones Industrial Average climbed 85.55 points, or 0.8 percent, to 10,414.44. Europe's Dow Jones Stoxx 600 Index rose 1.4 percent.
"It's very possible that we could get a rally in the last two weeks of the year," said Richard Sichel, Philadelphia-based chief investment officer at the Philadelphia Trust Co., which manages $1.4 billion. "You're looking at an economy that looks a lot better than it did a year ago. We've had some pretty good earnings, and if there's any top-line growth, we'll continue to see better earnings."
Economy, Yield Spread
The S&P 500 has advanced 65 percent since reaching a 12- year low in March as the U.S. government lent, spent or guaranteed more than $11 trillion to end the recession. Economic reports scheduled for this week include existing home sales for November and third-quarter personal consumption and gross domestic product.
To contact the reporter on this story: Lynn Thomasson in New York at firstname.lastname@example.org.