Libya's ceasefire aids Wall Street advance

Dow Jones: 11,858.52 (+83.93) SP 500: 1,279.21 (+5.49) Nasdaq: 2,643.67 (+7.62):US STOCKS rose yesterday, paring a weekly decline, as the Federal Reserve cleared the way for lenders to boost dividends and Libya announced a ceasefire.

Caterpillar rose 1.9 per cent after saying that retail machine sales jumped 59 per cent worldwide.

“It’s a return to normalization,” said Philip Orlando, the New York-based chief equity market strategist at Federated Investors, which manages $341.3 billion. “The Fed is saying what investors want to hear. It’s allowing banks to create value to shareholders. In addition to that, we have positive news on the international front,” he said.

“People will be moving back aggressively into stocks as soon as we get more clarity about Japan’s nuclear situation and the geopolitical unrest,” he said.

The Fed said some of the 19 largest US banks will be able to restart dividend payments, buy back shares or repay government capital after “significant improvement” in their capital positions and the economy.

JPMorgan, the second-largest US bank by assets, raised its quarterly payout to 25 cents a share from 5 cents and authorized a $15 billion stock buyback. Its shares rallied 2.7 per cent to $45.74.

Wells Fargo authorized the repurchase of 200 million shares and a special dividend of 7 cents a share, which will raise the first- quarter payout to 12 cents. Wells Fargo added 1.5 per cent to $31.83.

US Bancorp advanced 1.1 per cent to $26.65. BBT rose 0.5 per cent to $27.01. SunTrust climbed 4.7 per cent to $29.59. KeyCorp jumped 0.8 per cent to $8.92.

State Street rose 2.2 per cent to $44.37. Citigroup gained 1.1 per cent to $4.50.

Goldman Sachs was up 2.7 per cent to $159.96. The fifth-biggest US bank by assets will buy back $5 billion of preferred stock sold to Warren Buffett’s Berkshire Hathaway at the height of the 2008 financial crisis and won approval from the Fed for a dividend increase and buyback.

Cisco Systems rallied 0.8 per cent to $17.14.

Nike retreated 9.2 per cent to $77.59. The world’s largest sporting goods company reported profit that missed analysts’ estimates for the first time in 19 straight quarters, amid higher costs. – (Bloomberg)