Sun, Jun 17, 2012 - Page 10 News List

US stocks up on stimulus hopes

‘GOOD NEWS’:As one analyst said it, either Greece stays in the euro after the poll or the major central banks start pumping money like crazy to keep the world going

AFP, NEW YORK

US stocks ended a roller-coaster week at the top on Friday on hopes that central banks would take coordinated action if Greece’s crucial weekend election unleashes market turmoil.

Wall Street nervously watched developments in Europe’s rising debt crisis and braced for the Greek election today, which could lead the debt-riddled country to exit the eurozone.

Investors were also betting on additional stimulus from the US Federal Reserve at the Federal Open Market Committee’s policy meeting on Tuesday and Wednesday.

The Dow Jones Industrial Average of 30 blue chips advanced 1.7 percent for the week to 12,767.17 points.

The broader S&P 500 added 1.3 percent to 1,342.84 and the tech-rich NASDAQ underperformed both, edging up a mere 0.5 percent to 2,858.42.

Typical of the week’s topsy-turvy volatility, stocks on Friday rallied “on the perverse thought that no matter what comes out on Sunday night, it’s going to be good news: Either the austerity plan continues and they stay in the euro or they decide not to and the central banks have to pump like crazy,” Mace Blicksilver at Marblehead Asset Management said.

Disappointing US data on regional manufacturing and consumer confidence also spurred confidence that the Fed would announce more stimulus for the feeble economy.

For the first time since April, the Dow posted back-to-back triple-digit daily gains on Thursday and Friday.

“Ahead of Sunday’s all important elections in Greece, investors cheered reports that major central banks are preparing a coordinated action to provide liquidity in an effort to improve lending conditions. With investors focused on hopes of stimulus measures, a batch of weak economic data was overlooked,” Wells Fargo Advisors said.

That was not the case on Wednesday, when data showing weak US consumer buying last month hit stocks. Retail sales last month fell 0.2 percent from April, and excluding autos were down a heftier 0.4 percent, the US Department of Commerce reported.

“Considerable weakness is showing up on the consumer front as the May retail sales report is in line with weak job numbers, declining consumer confidence, a volatile stock market” and other factors, Chris Christopher at IHS Global Insight said.

The coming week’s economic calendar is fairly charged, in addition to the keenly anticipated two-day Fed policy meeting.

Investors are expected to closely follow the G20 summit in Mexico tomorrow and on Tuesday where the leaders of the major economies are due to grapple with Europe’s crisis and other global ills.

A look at conditions last month in the depressed housing sector will come on Tuesday, with housing starts and building permits numbers.

Existing-home sales for last month will be released on Thursday, along with weekly jobless claims.

This story has been viewed 2708 times.
TOP top