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Wall Street remembered the two-year anniversary of the implosion of Lehman Brothers on Wednesday by resuming its September surge as the markets overcame early selling pressure stemming from the tumbling Japanese yen and a mixed batch of economic reports.
The Dow Jones Industrial Average rose 46.24 points, or 0.44%, to 10572.73, the S&P 500 gained 3.97 points, or 0.35%, to 1125.07 and the Nasdaq Composite picked up 11.55 points, or 0.50%, to 2301.32. The FOX 50 added 3.42 points, or 0.42%, to 809.93.
The bulls managed to wave off concerns triggered by a 13-month low for a New York manufacturing report and a 3% tumble for the yen in the wake of Japan’s first intervention in the currency market in six years. After initially losing ground on those factors, U.S. stocks turned positive and eventually closed near session highs.
“We see data that point a little bit one way and a little bit the other way. Traders are looking for consistent data to help them decide whether to go long or short,” NYSE trader Robert Heller MEB Options told FOX Business. “There is not a lot of conviction. People are still buying puts to protect. It’s still a tough market to trade on.”
Coming two years to the day of the collapse of Lehman Brothers that helped trigger the depths of the financial crisis, Wednesday's session left the Dow at fresh one-month highs and in the green for the ninth time in 11 sessions. In fact, the Dow has mounted its strongest start to a September since 1939.
“The real question is whether we are overbought here. I think we may get a minor pullback, but earnings and macro data will support the market if we get any real downward pressure,” said Peter Kenny, managing director at Knight Capital Group.
Most of the Dow's 30 components made headway, led by Travelers (NYSE:TRV) and Kraft (NYSE:KFT). The index's worst performers were United Technologies (NYSE:UTX) and Alcoa (NYSE:AA).
The Nasdaq Composite posted bigger gains than the broader markets amid strength in tech stocks like Yahoo! (NASDAQ:YHOO) and Oracle (NASDAQ:ORCL).
After receiving a flurry of economic reports that were not as awful as the markets had been bracing for, Wall Street took a peek at more cautionary indicators on Wednesday. The New York Federal Reserve said its Empire State Manufacturing Index dropped in September to a 4.14 reading, down sharply from 7.10 in August and well below the 7.0 reading predicted by economists. In fact, it was the index’s lowest reading since July 2009.
Also, the Federal Reserve said industrial production rose by 0.2% in August, slightly missing expectations for an increase of 0.3%. Capacity utilization rose 0.1 percentage points to 74.7%, compared with forecast for 75%.
On the other hand, fears about the U.S. succumbing to a deflationary spiral were likely eased by the Commerce Department, which said August import prices jumped 0.6%, doubling expectations. The increase was driven mostly by a strong rise in oil import prices, which rose by 2.1%.
Meanwhile, commodity-related and multinational stocks managed to shrug off a 3% drop by the yen against the dollar. The selloff came after Japan intervened to lower the yen’s value for the first time since 2004 in an effort to keep the currency markets from derailing the recovery. Monetary policy officials there left the door open for further moves. Wall Street tends to like a weaker U.S. dollar because it makes products made by American companies cheaper abroad, boosting profits.
Dollar-traded commodities headed south on Wednesday, led by crude oil, which sank 78 cents a barrel, or 1.02%, to $76.02. Copper dropped 0.04% a pound to $3.4580. Gold fell $3.00 a troy ounce, or 0.24%, to $1,266.70.
Novell (NASDAQ:NOVL) jumped 6% after the New York Post reported the enterprise software maker has reached a deal in principle to sell itself in two parts and is three to four weeks away from signing a deal. Under the plan, Novell would delist itself after selling its Linux SUSE systems business to a strategic buyer and the rest of the company to a private-equity firm, the paper reported.
AK Steel (NYSE:AKS) warned it sees an operating loss of about $20 a ton for the third quarter, triggering a 6% slide in the steel maker’s stock. AK Steel had previously forecasted a profit of $15 a ton and blamed the new guidance on higher operating and raw material costs and an 11-day maintenance outage at its Ashland furnace.
Yahoo! (NASDAQ:YHOO) stock climbed almost 5% after CEO Carol Bartz told reporters the Internet company isn’t close to selling its 39% stake in Chinese e-commerce group Alibaba. The comments throw cold water on analyst speculation Yahoo! was nearing a deal to unload its stake.
Google (GOOG:NASDAQ) confirmed to The Wall Street Journal it fired software engineer David Barksdale for "breaking Google's strict internal privacy policies." According to Gawker, Barskdale, 27, repeatedly took advantage of his position to access users’ accounts, violating the privacy of at least four minors during his tenure.
Kraft Foods (NYSE:KFT) predicted its acquisition of Cadbury will lead to $1 billion in revenue synergies by 2013 as North America’s largest food maker targets organic revenue growth of 5% or more. Kraft laid out a new global growth strategy that targets earnings per share growth of 9% to 11% and margins in the mid- to high-teens.
Goldman Sachs (NYSE:GS) was reportedly sued by former female employees alleging the banking giant knowingly practiced gender discrimination in its pay practices and promotions. According to Dow Jones Newswires, the suit says Goldman “systematically circumvented and excluded” women from higher positions and pay within the firm, paying them less than their male counterparts.
Micron Technology’s (NYSE:MU) stock dropped 4% in the wake of a downgrade from "buy" to "neutral" by Goldman Sachs, which said it underestimated the negative impact of tablet computers on the PC supply chain. Goldman, which had slapped a buy rating on Micron as recently as June, also lowered its price target on the stock from $12 to $7.85.
The U.K.'s FTSE 100 fell 0.21%, to 5555.56, France's CAC 40 dropped 0.50% to 3755.64 and Germany's DAX lost 0.22% to 6261.87.
In Asia, Japan's Nikkei 225 surged 2.34% to 9516.56, Hong Kong's Hang Seng advanced 0.14% to 21725.60 and China's Shanghai Composite lost 1.34% to 2652.50.