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8B Daily News– Wednesday, June 20, 2012 NEW YORK (AP) — Stocks rose sharply on Wall Street Tuesday as traders turned their focus back to corporate news from the U.S. and hopes that the Federal Reserve will come up with a plan to jumpstart the economy. Banks and materials stocks led the market higher. The Dow Jones indus- Stocks snap higher on hopes for new Fed action Wall Street is standing by to do so if needed. trial average soared 95.51 points to 12,837.33, its highest close in a month. Microsoft was one of the biggest gainers in the Dow. The stock jumped 3 per- cent after the company announced a new tablet computer called Surface to compete with the immensely popular iPad from Apple. Microsoft was up 86 cents at $30.70. Stock traders are also latching on to recent sig- nals from the Federal Reserve that the central bank may reveal plans to stimulate the economy at the end of its two-day meeting Wednesday. ''A good portion of today's strong market action is from a hope factor that we're going to get more easing from the Fed,'' said Peter Cardillo, chief market economist at Rockwell Global Capital. Economists say that even if the Fed does not act after its meeting, it will send a clear message that it Financial companies were among the best per- forming stocks as investors hoped for Fed action: Bank of America soared 4.5 per- cent, Citigroup gained 3.5 percent, JPMorgan Chase was up 2.2 percent and Morgan Stanley rose 3 per- cent. Bank investors were also pleased to learn that a federal housing agency will clarify the process under which home lenders are forced to buy back soured home loans. The buybacks have cost banks billions of dollars. The uncertainty surrounding how much loans they will have to repurchase from the government has led them to reduce lending. The agency's statement comes just as the housing market is showing signs of healing. American builders broke new ground on more single-family homes in May and requested more permits to build homes and apartments than they have in the past three and a half years. The Commerce Depart- ment also said April was much better for housing starts than first thought. The government revised In other trading, the Standard & Poor's 500 index rose 13.20 points to 1,357.98. Seven of the 10 industry groups in the S&P rose. The technology- heavy Nasdaq composite index rose 34.43 points to 2,929.76. The Dow Jones Utility average touched the highest level since August 2008 before closing slight- ly lower. In Europe, borrowing costs eased for Spain: its benchmark 10-year bond yield fell below the key 7 percent level to 6.99 per- cent. the figures up to 744,000, the fastest building pace since October 2008. Material stocks rose on the prospect of demand from home construction. US Steel rose over 9 per- cent and Freeport- McMoran Copper rose over 3 percent. Among other stocks making big moves: — Oracle soared 84 cents, or about 3 percent, to $27.96 after the soft- ware maker surprised investors with the early release of its fourth-quarter earnings. The results beat Wall Street's forecasts, and the company said new soft- ware licenses increased sharply. — J.C. Penney plunged $2.08, or 8.5 percent, to $22.25 after the chain store announced that Michael Francis, the former Target executive brought in to help redefine the compa- ny's brand, was leaving the company. It was the biggest loss of any stock in the S&P 500. Spain raised $4.28 bil- lion in an auction of 12- and 18-month bills, more than analysts had expected. However Spain's cost to raise the money skyrocket- ed. The Spanish govern- ment had to pay an interest rate of 5.07 percent for the 12-month bills, up sharply from 2.98 percent at the last such auction on May 14. Spain money. ''Even though it cost Spain dearly and yields rose to a record, the fact is that it was not shut out of the markets,'' said Cardil- lo. Still, investors were heartened to see that peo- ple were willing to lend markets rose: Spain's IBEX 35 index rose 2.7 percent. Germany's DAX added 1.8 percent and Major European stock France's CAC-40 rose 1.7 percent. — Barnes & Noble fell 61 cents, or 4 percent, to $14.63 after the book store chain reported a wider loss than Wall Street was expecting. It also reported that its Nook e-reader sales fell 11 percent in the quar- ter. The dollar and Treasury prices fell as traders moved money out of low-risk assets. The dollar fell about a penny against the euro to $1.27 and the yield on the 10-year Treasury note rose to 1.62 percent from 1.58 percent late Monday. With the unveiling of the Surface tablet, Microsoft is heading into unusual territo- ry: competing with its part- ners, the very same compa- nies that make Windows PCs. But Microsoft has little to lose, since PC manufac- turers have so far had very little success with their own tablets. With the unveiling of its tablet this week Microsoft Corp. is taking up the com- petition with Apple Inc. and its iPad by borrowing a page from Apple's playbook. It is keeping both software and hardware development under the same roof. ''If imitation is the sin- cerest form of flattery, the compliments from Microsoft poured down like a torrential storm on Apple last night,'' said analyst — Walgreen plunged $1.87, or 5.85 percent, to $30.09 after the company said it is buying a $6.7 bil- lion stake in European health and beauty retailer Alliance Boots. Investors worried about a deal that would expose the biggest U.S. drugstore chain to a continent beset by worries of a recession. Microsoft tablet risks alienating PC makers NEW YORK (AP) — Brian White at Topeka Cap- ital Markets. Even Steve Microsoft's famously tough-talking CEO sounded downright Zen and Apple- inspired as he introduced the Surface. ''We believe that any intersection between human and machine can be made better when all aspects of the experience — hardware and software — are consid- ered and working together,'' he said at Monday's launch event in Los Angeles. Ballmer,