Stocks Rally for 4th Week
U.S. stocks closed broadly higher Friday, shaking off fears over China’s currency shift, as strong corporate earnings reports again held center stage.
The Treasury bond market also calmed, and the dollar rallied. Oil prices rose.
The Standard & Poor’s 500 index gained 6.64 points, or 0.5%, to 1,233.68, leaving it up 0.5% for the week, the fourth straight weekly advance.
The Dow Jones industrial average added 23.41 points, or 0.2%, to 10,651.18.
Smaller stocks resumed their rally, and the Russell 2,000 index closed at a record high, up 1.6%.
“Second-quarter earnings have been pretty solid just about everywhere,” said Dean Gulis, who helps manage $2.5 billion at Loomis, Sayles & Co. “The market’s been pleasantly surprised.”
Enough so, apparently, to offset concerns about China’s surprise announcement Thursday that it would revalue its currency, allowing a slight appreciation in the value of the yuan.
Although many U.S. manufacturers have been agitating for a stronger yuan, the move holds risks -- including that the Chinese might lose their appetite for U.S. bonds and other securities.
Stocks slid Thursday as Treasury bond yields rose and the dollar tumbled against the euro and yen. The apparent attempted bombings in London Thursday also had soured investors’ mood.
But on Friday, buyers were back. Rising stocks outnumbered losers by about 2 to 1 on the New York Stock Exchange.
Retail issues recovered after sliding Thursday on worries that prices of Chinese-made goods would rise for U.S. buyers because of the revaluation. Target jumped 87 cents to $59.10 and Nordstrom rose 73 cents to $37.14.
Home builders’ shares also gained after falling Thursday.
Robust earnings from energy-services companies Schlumberger and Halliburton spurred buying in that sector. Schlumberger soared $4.32 to $82.28 and Halliburton jumped $4.59 to $53.29.
Energy stocks in general were higher as crude prices rebounded. Near-term oil futures in New York rose $1.52 to $58.65 a barrel. The price was up 56 cents for the week.
In the bond market, the 10-year Treasury note ended at 4.22%, down from 4.27%.
The dollar recovered to 111.20 yen after falling 2.98 yen to 110.08 on Thursday on China’s shift. The euro fell to $1.206 from $1.219.
On Wall Street, the technology sector was held back by Microsoft’s drop of 76 cents to $25.68. The company reported sharply higher earnings late Thursday, but some analysts were disappointed by the near-term revenue outlook.
Also, Google dropped $11.54 to $302.40 despite its report Thursday that quarterly profit quadrupled.
But Irvine-based chip maker Broadcom surged $4.39 to $43 for the second-best performance in the S&P; 500. The company reported better-than-expected earnings.
Another chip maker, Xilinx, rose added $1.35 to $28.35 on its profit report.
The tech-heavy Nasdaq composite index inched up 1.14 points, or less than 0.1%, to 2,179.74.
For the week Nasdaq was up 1.1%. The Dow was up 0.1%.
The market’s action will probably continue to be set by quarterly earnings reports next week, analysts said.
In foreign trading Friday, Asian stock markets were mixed on the heels of the Chinese currency move.
In Japan the Nikkei 225 index fell 0.8% to 11,695.05. Stocks were slightly lower in South Korea and Taiwan and were up modestly in Singapore.
Asian currencies mostly stabilized after rallying Thursday with the upward revaluation of the yuan.
In China, investors reacted favorably to the currency shift. The Shanghai market’s B-share index rocketed 7.2% to 55.01. The Shenzhen market’s B-share index gained 3.7% to 210.71. Class B shares are those available to all foreign investors.
But U.S.-traded Chinese shares mostly pulled back after surging Thursday. Jilin Chemical fell 39 cents to $23.21. Aluminum China fell 69 cents to $60.63.
