US stock markets shrugged off higher oil prices and Japan’s quake disaster this week to gain back some of the losses racked up since late last month, helped by positive earnings reports from leading companies.
The Dow Jones Industrial Average added 3.1 percent for the five days to end at 12,220.59.
The broad-based S&P 500 gained 2.7 percent to 1,313.80.
The tech-focused NASDAQ Composite outdid the others, after lagging for several weeks, gaining 3.8 percent to end at 2,743.06.
In a week that began with turmoil across North Africa and the Middle East — especially in oil-exporting states like Yemen and Libya — sending a fright into markets, traders opted to ignore politics for corporate news in the last sessions.
They also appeared to blow off the fall of the Portuguese government, a move that killed its own markets-approved fiscal restructuring plan and made it highly possible the EU would have to organize a rescue.
“Investors have been trying to measure the impact on global economy and earnings of those three events,” Hugh Johnson of Hugh Johnson Advisors said. “And the answer or message of the market is investors believe those three events will affect global economy and will affect earnings, but they will not derail the current bull market and economic expansion.”
The market took a boost at the beginning of the week from AT&T’s plan to buy T-Mobile USA in a US$39 billion deal that would make it the country’s largest cellphone carrier, and the US Treasury’s decision to begin selling off US$142 billion worth of mortgage-backed securities.
Both were seen as signs that markets are getting stronger, though AT&T still has to run the gauntlet of regulators.
AT&T closed the week up 3.5 percent, while rival Verizon — which would be demoted to the second-largest cellphone carrier after the deal — gave up 4 percent.
However, there was negative news at the biggest banks.
The US Federal Reserve rejected Bank of America’s (BOA) plan to boost its dividend, effectively sending the bank back to the drawing board on its capital plan.
Citigroup got approval for its dividend plan, but it was a mere US$0.01 a share, and that after a reverse stock split that will reduce by 90 percent the number of outstanding shares.
BOA ended the week down 5 percent, while Citigroup lost 0.9 percent.
“The road to recovery from the Great Recession has not been smooth, and this past week was especially bumpy,” Patrick Newport at IHS Global Insight said.
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