Market advances as durables boost sentiment
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By Caroline ValetkevitchNEW YORK (Reuters) - Stocks gained on Tuesday as data showing a higher-than-expected rise in orders of durable goods last month eased some economic worries, helping shares of major manufacturers.Investors also expected another interest rate cut from the Federal Reserve, which added to optimism.After the government data showing higher demand for long-lasting manufactured goods, plane maker Boeing Co rose 2.1 percent at $79.20 and heavy-equipment manufacturer Caterpillar Inc gained 1.3 percent at $69.09. They were among the top advancers in the Dow's 30 industrial stocks.Another gauge, the Dow transportation average <.DJT>, rose 1.7 percent, turning positive for the year and signaling strength for both manufacturing and transportation.The Fed's policy-setting Open Market Committee was set to meet on Tuesday and Wednesday, and investors expected the session to conclude with the announcement of a rate cut, the second in about a week. After signs of weakness in the housing and jobs sector, another reduction in borrowing costs for businesses and consumers was seen as the tonic needed for economic recovery."If we get a decent January jobs report, with upward revisions to December, I think the recession and end-of-the-world scenario gets shoved into an open elevator shaft," said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Connecticut.The Dow Jones industrial average <.DJI> was up 68.53 points, or 0.55 percent, at 12,452.42. The Standard & Poor's 500 Index <.SPX> was up 6.87 points, or 0.51 percent, at 1,360.84. The Nasdaq Composite Index <.IXIC> was up 2.06 points, or 0.09 percent, at 2,351.97.Earnings from Dow Chemical Co , the largest U.S. chemical company, also helped to boost sentiment. Shares of Dow rose 3.1 percent to $38.77 after it reported results above expectations.But shares of EMC Corp , the world's biggest maker of corporate storage gear, fell 8 percent to $15.56 after the company said it expects revenue growth to slow in 2008. Its shares were the biggest drag on the S&P 500.(Additional reporting by Ellis Mnyandu; Editing by Kenneth Barry)
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