Stocks edge higher on economic data
Wall Street finished a lackluster session with modest gains Friday as stronger-than-expected economic data helped investors rebound slightly from their disappointment with the Federal Reserve’s latest policy statement. The major indexes finished the week narrowly higher.
The market started the third quarter quietly as many traders left for the long holiday weekend. Stocks had dropped sharply Thursday as the Fed gave no indication it would stop its steady, gradual interest rate hikes. The central bank also raised the nation’s benchmark rate a quarter percentage point to 3.25 percent on Thursday.
But some analysts felt the selloff, which slashed nearly 100 points from the Dow Jones industrials, was overdone, and bargain hunters lifted stocks Friday despite another surge in crude oil prices. Strong manufacturing data and a bullish consumer confidence report helped the major indexes stay positive.
“Clearly cooler heads are prevailing today,” said Joseph Keating, chief investment officer at AmSouth Asset Management. “We’re seeing a far more rational response to the Fed, and yesterday’s selloff is making for a pretty good buying opportunity.”
The Dow rose 28.47, or 0.28 percent, to 10,303.44.
Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index was up 3.11, or 0.26 percent, at 1,194.44, and the Nasdaq composite index gained 0.41, or 0.02 percent, to 2,057.37.
Bond prices plummeted after rallying Thursday in the wake of the Fed’s policy announcement. The yield on the 10-year Treasury note rose to 4.04 percent from 3.92 percent late Thursday. The dollar rose against most major currencies, while gold prices moved lower.
Stocks were volatile this week, swinging higher as oil prices fell, then dropping on the Fed’s announcement and, finally, ending the week nearly unchanged. For the week, the Dow gained 0.05 percent, the S&P rose 0.24 percent and the Nasdaq climbed 0.2 percent.
Oil prices soared Friday as investors locked in their positions before the long weekend, though prices remained far below Monday’s record-setting levels. A barrel of light crude settled at $58.75, up $2.25, on the New York Mercantile Exchange.
Investors were encouraged by another sign of consumer optimism. The University of Michigan’s closely watched consumer sentiment index rose to 96 in June, better than the 94.6 reading Wall Street expected and up from 94.8 in May.
In addition, the Institute for Supply Management’s manufacturing index was stronger than expected. The ISM index for June came in at 53.8, far better than the 51.5 reading economists had forecast and up from a reading of 51.4 in May.
Advancing issues outnumbered decliners by nearly 5 to 3 on the New York Stock Exchange, where volume came to 1.58 billion shares, compared with 2.09 billion on Thursday. The Russell 2000 index of smaller companies was up 3.38, or 0.53 percent, at 643.04.
Overseas, Japan’s Nikkei stock average rose 0.4 percent. In Europe, Britain’s FTSE 100 closed up 0.93 percent, France’s CAC-40 climbed 0.95 percent for the session, and Germany’s DAX index gained 0.67 percent.