Sun, Nov 24, 2013 - Page 15 News List

Buoyant US stocks keep hitting new peaks

FRESH HIGHS:The week saw the Dow surge past 16,000, while the S&P 500 stood above 1,800. Experts see little risk of equities retreating in the near term

AFP, NEW YORK

Workers gather items for delivery from the warehouse floor at Amazon’s distribution center in Phoenix, Arizona, on Friday. The Web-based retailer is preparing for Cyber Monday, the Monday after Thanksgiving Day in the US and usually the busiest day of the year for online purchases.

Photo: Reuters

US stocks soared to fresh heights once again this week, notching new landmarks amid solid economic data, loose monetary policy and, above all, buoyant sentiment.

The week concluded with a one-two bang on Thursday and Friday, with two of the three leading indices closing above psychologically important benchmarks for the first time.

The Dow Jones Industrial Average on Thursday recorded its first-ever close above 16,000 and ended the week at 16,064.77, up 103.07 (0.65 percent). The Dow has closed at new records 41 times this year, according to data from S&P Dow Jones Indices. Then on Friday, the broad-based S&P 500 reached a new peak of its own, finishing above 1,800 for the first time at 1,804.76, up 6.58 (0.37 percent) for the week.

Both the Dow and S&P 500 have now posted gains for seven weeks in a row.

The tech-rich NASDAQ Composite Index was outshone by the other two indices, gaining just 5.68 (0.14 percent) at 3,991.65. However, it is close to crossing 4,000 for the first time in more than 13 years.

The week’s trade showed investors are not completely devoid of anxiety.

Comments by activist Carl Icahn warning of a potentially big drop in stocks sent them lower on Monday and came as some other analysts warned of a correction. A sell-off followed on Wednesday after US Federal Reserve minutes said the Fed could soon scale back its bond-buying program.

However, the overall mood of the market remains fairly giddy, with many analysts seeing little in the horizon to threaten stocks.

“There’s not a lot of negative news to slow stocks,” said Sam Stovall, chief investment strategist at Standard & Poor’s Capital IQ. “Little by little, people are throwing in the towel, meaning they are joining in on the rally.”

“The trend is still in place,” said Michael James, managing director of equity trading at Wedbush Securities. “The market has had a very strong year, and with six weeks to go, I don’t anticipate that changing. Any pullback is likely be shallow and short-lived.”

Bill Lynch, director of investment at Hinsdale Associates, attributed this week’s gains to the solid economic data, including a better-than-expected report on last month’s retail sales and the lowest weekly jobless claims count in two months.

However, Scott Wren, senior equity strategist at Wells Fargo Advisors, said the bigger factor was confidence that the Fed would not scale back its bond-buying program too quickly, especially with the likely confirmation of Fed Vice Chair Janet Yellen to the top spot.

The week’s corporate news was dominated by a stream of earnings reports from retailers. Home Depot was a standout, raising its earnings forecast for the third quarter in a row on the improving housing market.

However, several retailers signaled that the push to lure in customers during the crucial holiday shopping season would likely crimp profits.

Best Buy chief financial officer Sharon McCollam said the electronics chain would compete aggressively on price.

“If our competition is in fact more promotional in the fourth quarter, we will be too and that will have a negative impact on our gross margin,” she said.

Analysts say volatile trade is possible next week given that trading volumes will likely be light due to the Thanksgiving holiday.

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