U.S. Stocks Have Biggest Gain in Three Weeks on GDP, Inflation Nov. 29,2006

The U.S. stocks had their biggest gain in three weeks after the economy expanded at a faster rate last quarter than first reported without stoking inflation. Exxon Mobil Corp., the world's largest oil company, and other energy producers advanced as crude rose to a two-month high, lifting the Standard & Poor's 500 Energy Index to a record. Tiffany & Co., the second-biggest luxury jeweler, jumped after raising its full-year earnings forecast on demand from holiday shoppers. AT&T Inc. led telephone companies higher as Fitch Ratings said they will gain Internet subscribers. The S&P 500 climbed 12.76, or 0.9 percent, to 1399.48. The Dow Jones Industrial Average added 90.28, or 0.7 percent, to 12,226.73. For both measures, it was the largest rally since Nov. 6. The Nasdaq Composite Index advanced 19.62, or 0.8 percent, at 2432.23. ``Inflation doesn't seem to be a problem,'' said Gil Knight, who helps manage $40 billion at Gartmore Global Investments in West Conshohocken, Pennsylvania. ``The economy is moving ahead. That's got to translate back into the stock market.'' Gains in the past two days allowed the S&P 500 to bounce back after starting the week with its steepest one-day drop since June 5 amid a falling dollar and sales slump at Wal-Mart Stores Inc. The index has risen 1.6 percent in November and is headed toward its sixth consecutive monthly gain, the longest stretch of advances since August 2003. Economic Expansion: The economy expanded at an annual rate of 2.2 percent last quarter, the government said. The pace was faster than an initial estimate of 1.6 percent and above economists' forecasts, largely because of higher inventories. A measure of inflation watched by Federal Reserve policy makers was revised lower, to 2.2 percent from 2.3 percent. Exxon gained $1.87 to $76.03. Nabors Industries Ltd., the largest onshore oil and natural-gas driller, added $1.23 to $33.86. The S&P 500 Energy Index surged 2.9 percent, the best performance among the benchmark's 10 sub-indexes, to a record 460.59. Crude futures climbed 2.4 percent to $62.46 a barrel in New York, the highest since Sept. 29. A report showed that U.S. heating-oil supplies fell and below-normal temperatures are moving toward the eastern U.S., suggesting increased fuel use. Tiffany rallied $2.29 to $38.22. The luxury retailer raised its full-year net income forecast by 2 cents a share to as much as $1.84 after new jewelry designed by architect Frank Gehry bolstered demand. Third-quarter profit also increased 23 percent on sales in the U.S., beating analysts' estimates. Internet Subscribers: Telephone stocks as a group climbed 1.6 percent. Fitch said AT&T and Verizon Communications Inc., the two largest U.S. phone companies, will gain Internet subscribers next year, mitigating losses as a growing number of local phone customers switch to cable providers. AT&T increased 68 cents to $33.50. BellSouth Corp., which is being bought by AT&T, added 79 cents to $43.66. Verizon gained 49 cents to $34.89 after A.G. Edwards & Sons Inc. raised the stock to ``buy'' from ``hold.'' Almost five stocks advanced for every one that declined on the New York Stock Exchange in the broadest rally since Oct. 12. Some 1.61 billion shares changed hands on the Big Board, 3.4 percent more than the three-month daily average. `Room to Move' Stocks extended their gains after the Fed, in its regional survey, cited ``moderate growth'' in most districts because of gains in consumer spending and ``solid'' expansion in service industries. Fed Chairman Ben S. Bernanke yesterday said U.S. growth will pick up next year and suggested the central bank would be compelled to raise interest rates further if inflation remained a risk. ``We saw a stronger-than-expected third quarter without an accompanying increase in the inflation aspect,'' said Sam Stovall, chief investment strategist at Standard & Poor's in New York. ``That implies additional Fed rate increases are off the table.'' Stocks ``still have room to move to the upside.'' Fed policy makers, who have held interest rates at a more than five-year high of 5.25 percent at the last three meetings, are scheduled to meet again on Dec. 12. Investors looked past a government report showing new home sales dropped a larger-than-expected 3.2 percent in October. ``For the people saying that the economy is going to tank because of the housing market, that's just not happening,'' said Gartmore's Knight. Takeover Speculation: Specialty-metal producers jumped after Alcan Inc., the world's second-largest aluminum producer, said it's considering acquiring a titanium producer because of rising demand from the aerospace industry. Allegheny Technologies Inc. rallied $5.64 to $88.36 after saying margins for titanium and nickel alloys may approach 40 percent in the next two or three years. Titanium Metals Corp. surged $2.17 to $30.42, while RTI International Metals Inc. advanced $3.56 to $75.16. Other steelmakers rose on takeover speculation. U.S. Steel Corp., the nation's largest steelmaker, climbed $2.57 to $73.99. Smaller rival Nucor Corp. was up $2.29 at $60.01. This month, Brazil's Cia. Siderurgica Nacional SA made a bid for the U.K.'s Corus Group Plc, setting the stage for a takeover battle with India's Tata Steel Ltd. that would create the world's fifth-biggest steelmaker. Elsewhere, New York Times Co. had the top advance in the S&P 500, jumping $1.73, or 7.5 percent, to $24.76, on speculation Maurice ``Hank'' Greenberg, the former chairman of American International Group Inc., would try to take over the company. ``Mr. Greenberg owns a total of less than 100,000 shares of New York Times stock,'' his spokesman, Mark Corallo, said in an interview after the market closed. ``He has no present intention of significantly increasing his holdings.'' Fluor, Dollar General: Fluor Corp., the largest publicly traded U.S. engineering and construction company, gained $2.94 to $85.32. The company won a $2.2 billion contract to help build a Saudi Kayan Petrochemical Co. plant in Saudi Arabia. Among decliners in the S&P 500, Dollar General Corp. had the sharpest retreat, sinking $1.01, or 6 percent, to $15.70. The retailer plans to close more than 400 stores next year and record expenses of about $138 million. 3Com Corp., a maker of computer-networking equipment, slumped 47 cents to $4.02 on concern the company may struggle without the help of Huawei Technologies Co., its Chinese partner, after buying the remaining stake in their venture. 3Com is paying $882 million for a 49 percent stake in Huawei-3Com Co. NYSE Group Inc., owner of the world's largest stock exchange, retreated $5.45 to $95.75. JPMorgan Chase & Co. cut its rating on the shares to ``neutral'' from ``overweight,'' saying the stock is expensive relative to its earnings prospects. Spiders, Futures: S&P 500 shares, called Spiders, added $1.45 to $140.47. Nasdaq-100 tracking shares, known by their QQQQ symbol, gained 30 cents to $44.07. S&P 500 futures expiring in December advanced 13.60 to 1402.20 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures rose 13.50 to 1795.75. The Russell 2000 Index, a benchmark for companies with a median market value of $649 million, climbed 1.2 percent to 784.16. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, rose 1 percent to 14,049.68. Based on its gain, the value of stocks increased by $169.8 billion. 3Com Corp. (COMS US).[From Internet] Best regards, Suman Mukherjee India.