US stock markets enter a holiday-shortened week riding a wave of bullish momentum after corporate earnings season got off to a stronger-than-expected start.
Wall Street capped a seventh straight week of gains at 2007-2008 highs, “fed by announcements of good earnings and positive talk from companies,” Gregori Volokhine at Meeschaert Capital Markets said.
Over the week the Dow Jones Industrial Average rose 0.96 percent to close at 11,787.38 points on Friday, its highest finish since June 25, 2008. The tech-rich NASDAQ rose 1.93 percent to 2,755.30 points, its best since Nov. 6, 2007.
The Standard & Poor’s 500 index, a broad measure of the market, added 1.71 percent at 1,293.24,50 points, a level last seen on Aug. 28, 2008.
“US equity markets performed well over the week, as solid fourth-quarter earnings reports tempered a dose of sobriety on the economy,” IHS Global Insight analysts said in a client note.
Alcoa, which unofficially entered earnings season on Monday, was joined in posting forecast-busting results later in the week by computer chip maker Intel and banking giant JPMorgan Chase.
The US markets will be closed tomorrow in observance of the holiday for slain civil rights leader Martin Luther King.
However, investors will see earnings season pick up steam this week as big companies roll out financial results, beginning on Tuesday with Citigroup, IBM and Apple.
Goldman Sachs weighs in on Wednesday, followed by Google on Thursday and Bank of America and General Electric on Friday.
The US markets were resilient this week in the face of renewed worries about the eurozone sovereign debt crisis.
Successful bond issues by Portugal, Spain and Italy helped reassure investors that the prospect of default was receding.
A series of economic releases highlighted an improved but spotty economic recovery from recession.
On Thursday, news that the US trade deficit with the rest of the world narrowed unexpectedly in November had some analysts raising their forecasts for fourth-quarter GDP growth.
However, the politically sensitive US trade shortfall with China grew to two-thirds of the trade deficit of US$38.3 billion.
Trade and currency issues were expected to figure prominently in Chinese President Hu Jintao’s (胡錦濤) state visit to Washington next week.
Friday’s keenly awaited retail sales report for last month, including the crucial Christmas holiday shopping season, came in a bit below expectations with a gain of 0.6 percent from November.
Industrial production jumped 0.8 percent last month, double the average estimate, while consumer prices climbed 0.5 percent, led by surging gasoline prices.
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