Sun, May 29, 2016 - Page 15 News List

US stocks post best week since March

BRIGHT SPOT:Investors took Fed Chair Janet Yellen’s comment on the likelihood of a rate increase in the coming months as a vote of confidence in the US economy

Reuters and AFP, NEW YORK

US stocks rose on Friday and capped off its strongest week since March after US Federal Reserve Chair Janet Yellen said an interest rate hike would likely be appropriate “in the coming months.”

Yellen’s is the most important voice in a chorus of policymakers recently suggesting that the US economy has improved enough to warrant tighter borrowing costs, with a growing number of investors now expecting a hike next month or in July.

While higher interest rates choke liquidity in stock markets, many investors see a potential interest rate hike as a vote of confidence that the struggling US economy is finding its legs.

“As we look at our place in the global economy, things just seem to be improving to a point where it certainly looks likely that June or July will be the next launching point,” said Paul Springmeyer, portfolio manager at the Private Client Reserve of US Bank.

“With the increased strength, we should get up off of those historically low levels where we are,” he said.

After Yellen’s speech, traders raised their expectations of a rate hike next month to 34 percent from 30 percent, according to CME Group.

The Fed next meets on June 14 and June 15.

Data on Friday showed US economic growth slowed in the first quarter, although not as sharply as initially thought.

All of the 10 major S&P sectors rose, with the telecom and financial indices leading the gainers.

The Dow Jones industrial average climbed 0.25 percent to end at 17,873.22 points and the S&P 500 gained 0.43 percent to 2,099.06.

The NASDAQ Composite Index added 0.65 percent to 4,933.51.

For the week, the S&P 500 rose 2.3 percent and the Dow added 2.1 percent, the best weekly performance for both since March.

The NASDAQ gained 3.4 percent for the week, its best weekly result since February.

For this year, the S&P 500 is up 2.7 percent.

Friday’s volume was muted as investors checked out ahead of a long weekend, with US stock markets closed tomorrow for the Memorial Day holiday.

Just 5.6 billion shares changed hands on US exchanges, well below the 7.1 billion daily average for the past 20 trading days, according to Thomson Reuters data.

Cybersecurity firm Palo Alto dropped 12.36 percent after a wider-than-expected quarterly loss.

GameStop fell 3.93 percent after the video-game retailer forecast lower-than-expected revenue and profit for the current quarter.

Financial stocks advanced, with Bank of America rising 1.2 percent and JPMorgan Chase and Goldman Sachs both up 0.6 percent.

US-listed Chinese stocks were another strong category, with Alibaba (阿里巴巴), rising 3.3 percent, Baidu (百度) 4.1 percent and (京東) 4.7 percent.

Google parent Alphabet climbed 1.2 percent after a jury ruled in a retrial that Google did not unfairly use parts of Oracle’s Java programming language in its Android smartphone operating system. The retrial stemmed from a 2012 case in which Google also had prevailed.

Oracle, which sought US$9 billion in damages, said there were grounds for an appeal. Oracle rose 0.3 percent.

FEI Co, which manufacturers high-tech microscopes, surged 14.3 percent following an announcement that it agreed to be acquired by Thermo Fisher Scientific for about US$4.2 billion. Thermo Fisher rose 0.6 percent.

Ulta Beauty leaped 9.1 percent after first-quarter net income shot up 37.3 percent to US$92 million and the cosmetics company pointed to “healthy” consumer demand for beauty products.

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