Weekly US stockmarket report: Nov 5th-12th

Despite a quarter point increase in interest rates by the Fed, the market continued its upward march for a third straight week.

Morningstar 17.11.2004
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The market gains were fairly broad based, as investors become more optimistic about the direction of the economy. The Morningstar US Market Index rose 1.8%, and all nine-style indexes ended the week higher than where they began. Small cap stocks [shares] outperformed large caps, with the Morningstar Small Cap Index gaining 2.95% and the Morningstar Large Cap Index measuring a smaller 1.53% gain.

Strong performance from the Industrial Materials sector boosted the Morningstar Mid Cap Value Index, which rose 2.45%. Steel companies NuCor and United States Steel rose substantially, adding 8.49% and 12.82% respectively. A 66% increase in steel prices since June, fueled in large part by a growing demand from China, was one of the main reasons. Blockbuster also boosted the index. It rose

22.11% after it made a billion-dollar bid for Hollywood Entertainment, its smaller rival.

The Morningstar Large Growth Index rose only 1.02%, despite some strong gains from eBay and Dell. News of improved retail spending and a continuing acquisition spree propelled eBay's stock up 10.24%, while Dell's 37% earnings increase boosted the stock by 7.87%.

Cardinal Health, a drug distributor that has lost considerable market value this year, jumped 9.69% when the company reported a smaller drop in earnings than investors expected. Losses at Pfizer and Cisco were a drag on the index. Pfizer suffered from a report citing health risks in its Bextra arthritis drug, and Cisco fell after reporting a rise in profits that was lower than analyst expectations.

For a more in-depth look into market performance please click on the Morningstar Weekly Market Report via the link on the right.

This article first appeared on http://indexes.morningstar.com.
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