US stocks rebound on economic reports

NEW YORK (AFP) - US stocks jumped Tuesday, recovering much of Monday's losses and picking up momentum from solid economic indicators.

The Dow Jones Industrial Average finished 99.22 points higher (0.71 per cent) at 13,979.30.

The S&P 500 index climbed 15.58 (1.04 per cent) to 1,511.29, while the tech-rich Nasdaq Composite Index rose 40.41 (1.29 per cent) to 3,171.58.

In a mid-afternoon market update, Charles Schwab & Co attributed Tuesday's "solidly higher" returns to economic reports showing US services sector activity rising and the contraction in eurozone business activity decelerating.

The Dow blue-chip members almost universally rose, with the biggest gains coming from UnitedHealth Group (up 3.7 per cent), Bank of America (up 3.4 per cent), JPMorgan Chase (up 2.3 per cent) and American Express (up 2.1 per cent).

Some companies on the Nasdaq index also performed well, with Apple jumping 3.5 per cent and BlackBerry rising 7.6 per cent.

Dell shares gained 1.1 per cent at US$13.42 after the company announced a US$24.4 billion deal to go private, valuing the company at $13.65 a share.

Dell rival Hewlett-Packard also gained, rising 2.5 per cent.

British Internet and cable TV firm Virgin Media gained 17.9 per cent as it confirmed talks with Liberty Global to be acquired by the US cable giant.

Liberty Global fell 2.3 per cent.

McGraw-Hill, the owner of S&P, nosedived by 10.7 per cent, the second day of sharp declines, after the Department of Justice sued S&P over its ratings in 2007 of mortgage bonds. S&P competitor Moody's was also swept up in the negativity, dropping 8.8 per cent, even though it was not listed in the complaint.

Fast-food franchise giant Yum Brands, owner of Kentucky Fried Chicken and Pizza Hut, sank 2.9 per cent after its fourth-quarter earnings showed more impact in its China business from bad publicity over chicken raised on Chinese farms. Shanghai government officials are investigating after a television report showed excessive levels of antibiotics in chicken.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.02 per cent from 1.97 late Monday, while the 30-year rose to 3.22 per cent from 3.18 on Monday.

Bond prices and yields move inversely.

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