Industrial, materials stocks surge as China trade growth eases fears for global economy

Industrial, materials stocks surge on China trade

NEW YORK — Shares of commodity, industrial and materials stocks surged Thursday as reports from Asia provided investors some relief from fears about the global economic recovery.

Shares of companies including aluminum manufacturing giant Alcoa Inc., chemical maker DuPont and heavy equipment maker Caterpillar Inc. climbed after China said its exports surged by nearly 50 percent in May. Japan’s economy, the world’s second biggest, expanded at a faster pace than originally estimated in the first quarter as consumers spent more amid signs of a broadening recovery, according to a separate report.

Investors also were encouraged by a Labor Department report showing that total jobless claims last week dropped by the largest amount in almost a year, though the figure still fell short of economists’ forecast. Meanwhile, the Australian Bureau of Statistics said Thursday that country’s jobless rate fell to 5.2 percent in May as full-time employment increased for the ninth straight month.

“We’re seeing a rebound in these share prices as people reassess their outlook for the industry,” said Wells Fargo economist Mark Vitner. “Investors have gotten a little ahead of themselves recently in worrying about a slowdown in the global economy.”

Investors have been betting in recent weeks on inflation and possibly a double-dip recession, “not the likeliest outcome for the economy,” Vitner said.

Mining stocks got the biggest lift as more than 2,000 mining industry workers rallied against Australia’s proposed 40 percent tax on mining companies.

“There had been such a sharp and pronounced sell-off in the group that it was due for a snap back, and this was the news that fueled the rally,” said analyst Tony Rizzuto of Dahlman Rose & Co.

Industrial companies include a wide range of manufacturers and the companies that move those goods, such as railroads and package delivery companies. They are at the heart of the U.S. economy because they produce and move so many goods that consumers use every day.

Industrial stocks have collectively dropped about 12 percent since the beginning of May as the debt crisis in Europe has dampened hopes for a global economic recovery. The materials sector has fallen about 11 percent.

Shares of coal producer Massey Energy Co. jumped $2.22, or 7.8 percent, to $30.74 in trading Thursday, while St. Louis-based Arch Coal Inc. climbed $1.51, or 7.4 percent, to $22.02 and Stillwater Mining Co. stock rose 79 cents, or 6.6 percent, to $12.79.

The Standard & Poor’s 500 materials and industrials sector indexes each rose about 3.5 percent. The Dow Jones industrial average rose more than 270 points with energy stocks leading the market, while oil prices topped $75 a barrel.

Shares of Alcoa rose 45 cents, or 4.2 percent, to $11.25, while DuPont’s stock added $1.41, or 4 percent, to $36.99, and Caterpillar gained $3.14, or 5.5 percent, to $59.95. Deere & Co., which sells tractors, bulldozers and other products, climbed $2.60, or 4.7 percent, to $57.87.