Wall Street stocks on Friday finished on record highs after a jam-packed week of economic news that culminated with a solid US jobs report.
The Dow Jones Industrial Average rose 207.11 points (1.24 percent) to 16,924.28 this week, while the broad-based S&P 500 jumped 25.87 (1.34 percent) to end on 1,949.44 and the tech-rich NASDAQ Composite Index added 78.78 (1.86 percent) to close at 4,321.40.
The Dow and the S&P 500 now both stand at all-time record highs, with the NASDAQ at its highest level since mid-March.
BMO Private Bank chief investment officer Jack Ablinr described investor sentiment as “calm, confident and collected,” as the worries about Ukraine that preoccupied investors earlier in the spring have given way to conviction in stocks following aggressive stimulus by the European Central Bank (ECB).
“It seems like geopolitics has taken a back seat to finance and economics,” Ablin said.
The week’s highlights included last month’s auto sales exceeding expectations and a confident appraisal of economic conditions in the US Federal Reserve’s Beige Book.
On Thursday, stocks barreled higher following a series of new measures from the ECB, which lowered all three of its key interest rates, including putting the deposit rate into negative territory for the first time, meaning that banks will be charged for depositing their excess cash with the financial authority.
The move signaled that “global liquidity will remain high” even as the US Federal Reserve cuts stimulus, Kenjol Capital Management portfolio manager David Levy said.
On Friday, markets again enjoyed strong gains after the US Department of Labor reported that the country added a net 217,000 positions last month, about on a par with expectations.
Economists called the report solid and said that last month’s figure marks the fourth straight month in which the US economy has gained more than 200,000 jobs. The data reinforced the sense that the US economy continues to make solid, if unspectacular, progress.
Wells Fargo Advisors senior equity strategist Scott Wren forecasts that the US economy will grow by 2.4 percent this year.
“That modest growth is pretty dependable,” he said. “I don’t see a fundamental stumble as far as earnings and the broader economy.”
In corporate news, Japan’s Dai-ichi Life Insurance Co Ltd announced it was buying US insurer Protective Life Corp for US$5.7 billion, as it seeks to broaden its overseas business beyond Asia by entering the world’s biggest market for insurance sold to consumers.
Meanwhile, a major acquisition battle in the food industry continued to heat up as Brazil-owned US chicken processor Pilgrim’s Pride Corp raised it bid for Hillshire Brands Co to about US$7.7 billion, more than the US$6.8 billion offered by US rival Tyson Foods Inc.
Hillshire said it would consider both offers, even as it kept alive its own acquisition plan, a US$6.6 billion buyout of Pinnacle Foods Group LLC.
In non-merger news, General Motors Co released an internal report into its delayed decision to recall cars following an ignition problem linked to at least 13 deaths.
General Motors chief executive Mary Barra said the probe concluded there had been no concerted effort to hide the problem for more than a decade, instead showing a “deeply troubling” history of “incompetence and neglect.”
Next week’s calendar features a lighter load of data than this week, but with some major reports such as retail sales data and producer prices for last month to be released.
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