Stocks fluctuate ahead of manufacturing data
Not even the threat of a global flu pandemic could knock the world’s stock markets out of their bullish trajectories this week.
U.S. blue-chip indexes rose for the seventh week in the last eight. Indexes of some market sectors made it a full eight weeks up in a row.
“With everything that’s been thrown at the market, we think it’s holding up well,” said Ryan Detrick, an analyst at Schaeffer’s Investment Research in Cincinnati.
Wall Street’s bears insist that stocks are overdue for a sharp pullback, but modest setbacks this week just attracted more buyers. That’s what the bulls have been hoping to see.
The Standard & Poor’s 500 index fell 1% on Monday and 0.3% on Tuesday, then jumped 2.2% on Wednesday. After easing 0.1% on Thursday, the S&P; gained 0.5% on Friday to close at 877.52 -- its highest since Jan. 9. The S&P;’s net gain for the week: 1.3%.
The Dow Jones industrials added 44.29 points, or 0.5%, to 8,212.41 on Friday, its first close above 8,200 since Feb. 9. The Dow was up 1.7% for the week.
Investors continue to get bigger bangs for their bucks in smaller stocks. The S&P; small-cap index rose 1.9% for the week, its eighth straight weekly advance.
From their lows on March 9, the S&P; small-cap is up 43% while the S&P; 500 is up 30%.
Market optimists continue to latch on to reports that show the economy has stopped getting worse, even if it isn’t getting notably better.
On Friday, bulls were stoked by a jump in a key consumer confidence index to its highest reading since September. Also, a gauge of U.S. manufacturing activity posted a bigger-than-expected gain in April.
Such reports are driving some investors out of relatively safe government bonds and into stocks. The increased demand for Treasuries pushed up the yield on the benchmark 10-year T-note Friday to 3.17%, its highest close since Nov. 24.
Importantly, U.S. stocks aren’t rising in a vacuum: The rally, like the new flu, remains a global affair. Japan’s Nikkei-225 index jumped 3.1% for the week, Germany’s DAX index was up 2% and Brazil’s Bovespa index rose 1.1%.
So if American investors are wrong about the global recession bottoming -- and about the flu’s economic effect ultimately being modest -- they have a lot of company.
In other market highlights Friday:
* MasterCard fell 5.8% after saying its first-quarter revenue fell short of expectations.
* Insurers MetLife and Hartford Financial Services Group posted first-quarter losses. Both stocks sank almost 8%.
* McAfee surged 7.8% after the computer security company reported a 77% jump in profit.
* About two stocks rose for every one that fell on the New York Stock Exchange.
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