Posted on: Wednesday, May 18, 2005
Share prices move up for second day in a row
By Michael J. Martinez
Associated Press
NEW YORK — Stocks vaulted higher for a second straight session yesterday as investors welcomed the Treasury Department's move to put pressure on the Chinese currency system and, perhaps, eventually reduce the U.S. trade deficit.
The market began the day lower after the Labor Department's Producer Price Index showed higher-than-expected increases in wholesale prices. With the counterpart Consumer Price index due before today's session, analysts warned that Wall Street's late rally could be short-lived.
"It's encouraging to see these kind of gains two days in a row, and I guess I'm cautiously optimistic," said Neil Massa, an equity trader at John Hancock Funds. "But all this can be erased tomorrow with one number."
The bond market advanced, with the yield on the 10-year Treasury note falling to 4.12 percent from 4.13 percent late Monday. The dollar lost ground against other major currencies after big gains in the past few sessions. Gold prices rose.
Crude oil futures closed moderately higher, though the Treasury's stance on China helped Wall Street shrug off the increase.
Investors reacted decisively after the Bush administration declared in the afternoon that China may be using its monetary policies to unfairly affect trade. The Dow jumped 70 points higher in just 23 minutes, finishing with a two-day gain of 191, and the Nasdaq composite index climbed past the 2,000 mark for the first time in more than a month.
