US STOCKS-Wall St rallies on euro fund hope, momentum


* Alcoa drops after quarterly profit misses estimate* Dow up 1.3 pct, S&P 500 up 1.7 pct, Nasdaq up 1.5 pctBy Rodrigo CamposNEW YORK, Oct 12 (Reuters) - U.S. stocks extended their recent rally on Wednesday, with the S&P 500 on track for its sixth winning day in the past seven as the euro-zone rescue fund was set to get approval from all EU members.Momentum buying, or a move back into equities after the S&P 500 closed on Tuesday with its largest six-day rally since March 2009, was also cited as boosting U.S. stocks.Slovakian lawmakers struck a deal to ratify more powers for the euro zone’s rescue fund, known as the EFSF, effectively ending a crisis that threatens the euro’s survival and which has weighed on equities and other risky assets for months.Slovakia is the last country in the 17-member currency zone left to approve the revamped EFSF.Bank shares led the advance again, with the KBW Bank Index up 4 percent. Citigroup gained 5.7 percent to $29.43.”Europeans feel very comfortable that a plan has been put in place with respect to their banks and Greece, and the EFSF is going to solve the problem for now,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.The S&P 500 traded above 1,200 for the first time in three weeks, taking the benchmark near the upper end of a range it has been stuck at since early August. The index rose as much as 13 percent from the low hit last week, and some market participants say the steep rally has forced more people into equities, as they try to catch up in performance.”No one was there for the rally because people were under-invested,” Boockvar said.”We’re getting close to the upper end of the range so I don’t know how much of it is left, but I would not be surprised if we overshot on the upside.”The S&P 500 has been trading roughly between 1,080 and 1,220 for two months.The Dow Jones industrial average added 152.84 points, or 1.34 percent, to 11,569.14. The Standard & Poor’s 500 rose 20.10 points, or 1.68 percent, to 1,215.64. The Nasdaq Composite gained 39.08 points, or 1.51 percent, to 2,622.11.Alcoa Inc fell 1.6 percent to $10.14 and ranked as one of the biggest drags on the Dow. The largest U.S. aluminum producer’s third-quarter profit was below the second-quarter number and fell short of already reduced expectations due to a slump in global metals prices.But PepsiCo Inc rose 3.8 percent to $63.25 after the soft drink and snacks maker reported slightly better-than-expected earnings, helped by international growth and the acquisition of a Russian beverage company, and affirmed its full-year target.Liz Claiborne Inc surged 37.3 percent to $7 after the apparel company said it plans to sell off more of its major brands, including its namesake line, in the latest move to reduce its high debt load, and will change the company’s name as it focuses on three key brands.Later in the session, investors will also keep an eye on the Federal Open Market Committee’s minutes from its Sept. 20-21 meeting, to be released at 2 p.m. EDT. (1800 GMT)

  1. marileeudove posted this