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Stocks Surge, Recover Some Losses      10/16 15:56

   U.S. stocks rocketed to their biggest gain in six months Tuesday following 
strong earnings from major financial and health care companies as well as 
encouraging reports on the economy.

   NEW YORK (AP) -- U.S. stocks rocketed to their biggest gain in six months 
Tuesday following strong earnings from major financial and health care 
companies as well as encouraging reports on the economy. The Dow Jones 
Industrial Average jumped 547 points.

   Morgan Stanley, Goldman Sachs and UnitedHealth led a parade of companies 
that reported profits for the third quarter that surpassed analysts' 
expectations. Technology companies also jumped after taking steep losses during 
the market's rout last week.

   The S&P 500 index jumped 59.13 points, or 2.1 percent, its largest gain 
since March 26, and finished at 2,809.92. Stocks have bounced around over the 
last three days, and the S&P 500 is down 4.1 from its record high on Sept. 20. 
The Dow gained 547.87 points, or 2.2 percent, to 25,798.42.

   The Nasdaq composite climbed 214.75 points, or 2.9 percent, to 7,645.49 as 
technology companies reversed some of their outsize losses from the last few 
days. The Russell 2000 index of smaller-company stocks had its biggest rally in 
almost two years as it surged 43.74 points, or 2.8 percent, to 1,596.84.

   Even with the big gains, major indexes are still broadly lower for the month 
following a two-day rout last week that erased nearly 1,400 points from the Dow.

   Investors were encouraged by some good news on the economy. The Federal 
Reserve said output by U.S. factories, mines and utilities climbed in September 
despite the effects of Hurricane Florence, and the Labor Department said U.S. 
employers posted the most jobs in two decades in August while hiring continued 
to increase.

   Scott Wren, senior global equity strategist for the Wells Fargo Investment 
Institute, said stocks jumped because the industrial production report suggests 
inflation isn't speeding up, and that investors took that as a sign the Fed 
won't accelerate the pace of its interest rate increases.

   "Anything that helps the market think that the Fed won't make a mistake is 
good," Wren said.

   Netflix soared 12 percent to $387 in aftermarket trading after reporting 
surprisingly strong subscriber growth during the summer. That was a welcome 
change from the big losses it took after its second-quarter report, when it 
posted disappointing subscriber totals and gave a weak forecast. Netflix is up 
80.5 percent this year, the fourth-best of any S&P 500 stock.

   UnitedHealth, the largest U.S. health insurer and provider of privately-run 
Medicare Advantage plans, once again topped Wall Street forecasts and raised 
its projections for the year. The stock climbed 4.7 percent to $272.57. That 
suggests other health insurers are likely to report strong results in the next 
few weeks. Cigna advanced 3.9 percent to $211.96.

   Health care products giant Johnson & Johnson added 1.9 percent to $136.56 
after it said prescription sales jumped.

   Morgan Stanley rose 5.7 percent to $45.94 and Goldman Sachs added 3 percent 
to $221.70 after the two investment banks did better than expected in the third 
quarter, helped by strong performance in their trading operations and 
better-than-expected revenue from stock underwriting. Morgan Stanley's stock 
has fallen 12 percent this year and Goldman has lost 13 percent.

   Technology companies rose. Microsoft jumped 3.2 percent to $110.65 and Adobe 
rallied 9.5 percent to $260.67 after it backed its fourth-quarter profit and 
revenue forecasts. The stock has jumped 49 percent this year, but had slumped 
in recent days. Internet companies also advanced. Alphabet, Google's parent 
company, rose 2.8 percent to $1,133.08.

   On Wednesday Canada will legalize marijuana nationwide. While cannabis 
companies mostly traded lower Tuesday, the stocks have made huge gains this 
year in highly volatile trading. Tilray fell 4.4 percent to $158.38 while 
Canopy Growth shed 6.8 percent to $53.01.

   Benchmark Capital analyst Mike Hickey started coverage of Tilray with a $200 
price target Tuesday, saying its supply deals with pharmacies and a partnership 
with drugmaker Novartis will help make it an early leader in the market. Hickey 
valued the Canadian cannabis market at about $3.2 billion in 2019 and said it 
will climb to $8.1 billion by 2023.

   Tilray's market value stands at almost $15 billion, up ninefold since it 
went public in mid-July. Canopy Growth, which recently announced a big 
investment from Corona beer maker Constellation Brands, has more than doubled 
in value to $12.2 billion.

   The huge gains reflect investors' view that that other countries will 
legalize marijuana in the years to come.

   U.S. benchmark crude oil added 0.2 percent to $71.92 per barrel in New York. 
Brent crude, the international standard, rose 0.8 percent to $81.41 per barrel 
in London.

   Wholesale gasoline rose 1.7 percent to $1.98 a gallon and heating oil picked 
up 0.6 percent to $2.34 a gallon. Natural gas lost 0.1 percent to $3.24 per 
1,000 cubic feet.

   Bond prices edged lower. The yield on the 10-year Treasury note rose to 3.17 
percent from 3.16 percent.

   Gold rose 0.1 percent to $1,231 an ounce. Silver lost 0.2 percent to $14.70 
an ounce. Copper slipped 0.3 percent to $2.78 a pound.

   The dollar rose to 112.18 yen from 111.88 yen. The euro fell to $1.1578 from 
$1.1584.

   France's CAC 40 added 1.5 percent while the DAX in Germany jumped 1.4 
percent. Britain's FTSE 100 rose 0.4 percent. Italy's FTSE MIB jumped 2.2 
percent after the government avoided last-minute delays in presenting a budget 
plan.

   Japan's benchmark Nikkei 225 rallied 1.2 percent and the Kospi in South 
Korea was little changed. Hong Kong's Hang Seng index finished 0.1 percent 
higher.


(BE)

 
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