Stocks advance as calendar turns
NEW YORK – Wall Street extended its rally into a third month, shrugging off more reminders of the recession and placing cautious bets on an economic recovery.
Stocks ended higher Friday after a day of quiet back-and-forth trading as investors determined that they could add to the gains of March and April despite mixed economic data and earnings reports.
The advance left the stock market’s major gauges with gains of about 1.5 percent for the week.
The Dow Jones industrial average closed the week up 136.12, or 1.7 percent, at 8,212.41. The Standard & Poor’s 500 index rose 11.29, or 1.3 percent, to 877.52. The Nasdaq composite index rose 24.91, or 1.5 percent, to 1,719.20.
The Russell 2000 index, which tracks the performance of small company stocks, rose 8.24, or 1.7 percent, for the week to 486.98.
The Dow Jones U.S. Total Stock Market Index – which measures nearly all U.S.-based companies – ended at 8,998.73, up 135.67, or 1.5 percent, for the week. A year ago, the index was at 14,220.25.
The Nasdaq is up 9 percent for the year but the Dow and the S&P 500 remain lower.
Wall Street has been growing more optimistic about the economy stabilizing, but the reports Friday confirmed that business conditions remain difficult and that any recovery is likely to be gradual.
A private group’s measure of the manufacturing industry showed a slower contraction in April than March. However a separate government report said orders to U.S. factories fell more than expected in March.
Companies also reported mixed results. MasterCard Inc.’s first-quarter revenue fell short of expectations and two major insurance companies posted losses for the quarter. Reports from manufacturer Manitowoc Co. and computer security software maker McAfee Inc. beat forecasts.
Earnings reports have been a major driver of the stock market over the past few weeks. The S&P 500 index, a broad measure of the market, rose 9.4 percent in April, the biggest monthly jump since March 2000.
“After the big run-up everyone is just trying to step back and trying to put their game plan together for the next month,” said Sean Simko, head of fixed income management at SEI Investments in Philadelphia.
While many economic and earnings reports haven’t been as bad as expected, they’re still not good. Some analysts say the market’s enthusiasm over the early seeds of recovery is overdone.
“People keep talking about these ‘green shoots’ but to me that implies that something is growing. But nothing is growing at this point,” said Dan Cook, senior market analyst at IG Markets in Chicago.
© Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.