Market advances on staples, tech rebound
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By Ellis MnyanduNEW YORK (Reuters) - Stocks rose on Wednesday as investors snapped up shares of companies seen better positioned to withstand an economic downturn after Goldman Sachs forecast a U.S. recession in 2008.Investors bought defensive stocks including drugmakers such as Merck & Co and Pfizer Inc , and those of consumer staple companies such as Altria Group Inc , parent of cigarette maker Philip Morris.After Tuesday's sell-off took the S&P 500 stock index to its most oversold since March and cemented Wall Street's worst ever start to a year, investors scoured the market for stocks in beaten-down sectors, especially in technology.Shares of software maker Microsoft Corp , chip maker Intel Corp and computer services company International Business Machines Corp were among the tech standouts."It's beginning to dawn on people that the selling is overdone," said Michael Williams, chief investment strategist at Tocqueville Asset Management in New York.The Dow Jones industrial average <.DJI> was up 71.69 points, or 0.57 percent, at 12,660.76. The Standard & Poor's 500 Index <.SPX> was up 6.40 points, or 0.46 percent, at 1,396.59. The Nasdaq Composite Index <.IXIC> was up 13.63 points, or 0.56 percent, at 2,454.14.A favorable profit forecast from chemical company DuPont Co , a Dow component, also cushioned the market, along with optimism about news that the White House is considering a stimulus package to spur the economy.Even so, defensive stocks dominated, with shares of diversified healthcare company Johnson &Johnson up 1.7 percent at $68.05. It was the Dow's third top advancer, behind DuPont and IBM.DuPont shares rose 5.6 percent to $45.14 on the New York Stock Exchange. Merck shares were up 0.9 percent at $60.20, while Altria jumped 0.4 percent to $78.62.On the Nasdaq shares of Apple , the maker of the iPod and the iPhone, jumped 0.3 percent to $171.76, while Intel shares gained 2 percent to $22.70. These stocks were among those that had contributed to the Nasdaq's 8th straight day of losses on Tuesday.In a note to clients, Goldman said U.S. real gross domestic product would contract by 1 percent on an annualized basis in both the second and third quarters. For all of 2008, the investment bank said GDP would rise by only 0.8 percent.(Editing by James Dalgleish)
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