Stock rallies in Japan and the major European markets got Wall Street off to a fast start Wednesday amid optimism that the industrialized economies are headed for a slow-growth, low-inflation revival.
The Dow Jones industrial average, up more than 25 points during the day, closed with a gain of 13.13 points at 3697.08. The Nasdaq index of smaller stocks did better, closing up 9.42 at 763.81.
The Dow Jones transportation average gained 6.41 to a record 1763.61, breaking the high of 1759.98 set Nov. 16. Leading the rise was Elk Grove Township-based UAL, parent of United Air Lines, which rose $2.50 to $151.
Eleven stocks rose for every seven that declined on the New York Stock Exchange. Trading was active, with about 288 million shares changing hands on the Big Board.
Japan’s stock market has been faltering as the new government appears more preoccupied with political than economic reform. But after a government minister indicated the government would do more to help stimulate the economy, the Nikkei index soared more than 700 points to close at 17,125.31.
The British market rose more than 2 percent after traders got a look at a new government budget that includes more spending cuts and fewer tax increases than anticipated. The German market finished up 1.56 percent on hopes the Bundesbank will again lower interest rates.
In the U.S., bonds rose, sending yields in the opposite direction. The benchmark 30-year Treasury bond finished with a yield of 6.27 percent, down from 6.30 percent Tuesday. Stocks tend to rise on falling bond yields, as bonds appear less enticing to investors.
Economic news showed construction spending up 2.5 percent and third-quarter growth of 2.7 percent, both seen as signs of a moderate but persistent advance.
With those developments in the background, stocks of companies that do well in a growing economy had a good day. All the auto stocks gained, with Ford leading the pack, up $1.87 at $62.62.
Heartland report
Whirlpool of Benton Harbor, Mich., gained $2.75 to $62.12 after a Merrill Lynch analyst rated it a “buy” and named it the “focus” stock of the week. The analyst, Jonathan Goldfarb, said the company’s fundamentals are strong and its stock has been down in recent trading.
Whirlpool also has a strong position in Europe and stands to profit from economic recovery there. The company additionally is bringing back to the U.S. a microwave technology it developed in Europe that browns food like a conventional oven.
Whirlpool has mixed recommendations from analysts, according to Chicago-based Zacks Investment Research. Of 15 analysts covering it, seven rated it a hold, five a moderate buy and three a strong buy as of Nov. 1, Zacks reports in Analyst Watch.
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SPS Transactions Services of Riverwoods gained $5.62 to $61 with no apparent news propelling the upward drive. A company representative said the stock is volatile, with only 3.5 million shares outstanding, and was retracing ground it lost in a correction over the last several weeks.
SPS has traded between $36.25 and $71.12 in the last 52 weeks.
Chicago-based Navistar lost nearly 11 percent, or $2.75, to $22.37, after an analyst at J.P. Morgan Securities said he expects earnings to fall below expectations. Navistar is due to report its quarterly earnings Thursday.
The Chicago Board Options Exchange on Monday will begin long-term options, known as Leaps, for Bell Atlantic, Best Buy and MCI. The exchange will offer a total of 58 equities that can be traded as Leaps, which can extend for several years.
Chicken watch
Let no one say (no one has) that this is an anti-chicken column, reporting only the downside of Naperville-based Boston Chicken’s stock saga, such as the steady decline in price since it went public Nov. 9. After hitting an all-time (well, less than a month) low Tuesday, the stock Wednesday rose $2.12 to $39.50.