Shares on Wall Street surged to fresh highs in the past week on a seemingly unstoppable upward trajectory as investors cheered swelling corporate profits and a flurry of mergers and acquisitions.
The Dow Jones Industrial Average stock index has set fresh record highs almost daily in recent weeks despite darkening economic clouds as the market braces for a May 9 meeting of the Federal Reserve.
Most analysts expect the US central bank to keep its short-term fed funds interest rate firmly pegged at 5.25 percent at the meeting despite slowing economic growth.
The Dow index of 30 blue chips closed Friday at an all-time high of 13,264.62, marking a weekly gain of 1.09 percent.
The broad-market Standard and Poor's 500 index meanwhile spiked 0.77 percent to end the week at 1,505.63 points, edging closer to its all-time high of 1,527.46 struck in March 2000.
The tech-rich NASDAQ composite rose 0.58 percent for the week to 2,572.15.
Despite the solid gains, some analysts are warning that Wall Street could be due for a pullback, especially as the first quarter earnings season draws to a close and traders refocus on economic headlines.
"Unless you come with another catalyst to keep this party rocking, you've got to look for the market to pull back," said Marc Pado, a market analyst at Cantor Fitzgerald.
Looming earnings reports from big retailers may not prove to be too rosy, particularly following recent reports suggesting consumers might be tightening their belts.
"We are growing wary of what might lay ahead in a couple of weeks when the high profile retailers begin to report earnings," said Frederic Dickson, a chief market strategist at DA Davidson and Co.
"This could discourage the bulls and reawaken the bears," Dickson said.
US economic growth slowed markedly in the first quarter to an annualized 1.3 percent and a monthly job report on Friday showed hiring in April slowed to a weaker-than-expected 88,000 new positions amid an ongoing housing slump.
Analysts say a rate cut could help the housing market, but that the Fed will not want to make any moves to ease rates before being satisfied that inflation is under control.
Although the Fed is widely expected to keep rates unchanged in the coming week, some analysts believe it could move to ease rates later this year in a bid to stimulate the world's biggest economy.
Aside from the Fed meeting, next week will also yield fresh updates on inflation, retail sales, the US trade deficit with its major trading partners and snapshots on export and import prices.
Retail sales are expected to moderate to a gain of 0.4 percent for last month following a 0.7 percent rise in March while the March trade deficit is expected to widen to around US$60 billion.
Some analysts said that fresh mergers or takeovers could help underpin stocks in the days ahead, following a flurry of such deals in the past week.
Rupert Murdoch's News Corp empire unveiled a US$5 billion takeover bid for Dow Jones & Co in the past week, Cablevision agreed a US$22 billion takeover and Microsoft and Yahoo were reported on Friday to be exploring a possible merger or alliance.
"All told, the reports next week should be fairly benign in terms of the outlook for financial markets and slow to moderate growth [expectations] of close to 2 percent in the second quarter," economists at Global Insight said in a briefing note.
Bond prices firmed amid the soft economic data.
The yield on the 10-year Treasury bond declined to 4.640 percent from 4.698 percent a week earlier while the 30-year bond yield dropped to 4.804 percent from 4.885 percent.
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