US stocks rose for the week, with the Dow Jones Industrial Average reaching a record, as earnings topped forecasts and the US Federal Reserve said it will further trim bond purchases as the economy gains momentum.
The Standard & Poor’s 500 Index briefly climbed above its highest closing price on the final day, before tensions over Ukraine overshadowed data showing payrolls rose the most since 2012.
Pepco Holdings Inc surged 23 percent amid a pickup in deals activity. Yahoo Inc jumped 6.9 percent as Internet stocks rebounded after a selloff.
The S&P 500 rose 1 percent to 1,881.14 for the five days. The Dow added 151.43 points, or 0.9 percent, to 16,512.89. The NASDAQ Composite Index increased 1.2 percent.
“You had positive economic data and evidence the US economy is gaining momentum this week, which should be driving us to higher highs,” Chad Morganlander, a fund manager at Stifel Nicolaus & Co, said in a phone interview from Florham Park, New Jersey. “Even the Russian issue should have little effect on global growth, and the jobs number bodes well for future growth in the US.”
The Dow climbed to a record 16,580.84 on Wednesday, capping a three-day rally, after the Fed said the economy is perking up after stalling last quarter and the job market is improving.
Data on the final day showed US payrolls rose the most in two years last month and the jobless rate plunged to 6.3 percent, the lowest since 2008.
The US Federal Open Market Committee pared its monthly asset buying to US$45 billion, its fourth straight US$10 billion cut, and said further reductions in “measured steps” are likely.
GDP rose at a 0.1 percent annualized rate from January through March, compared with a 2.6 percent gain in the prior quarter, the US Department of Commerce said on the same day as the Fed decision.
Other data during the week showed consumers and companies were shaking off winter doldrums. Household purchases, which account for about 70 percent of the economy, rose 0.9 percent last month, the most since August 2009. Incomes increased by the most in seven months.
A report from the Institute for Supply Management showed factories added employees last month at the fastest pace in four months. Manufacturing climbed the most this year.
The S&P 500 has expanded 1.8 percent this year, while the Dow is down 0.4 percent. Tensions in Ukraine have offset better-than-forecast corporate earnings. US President Barack Obama and German Chancellor Angela Merkel set a May 25 trigger for possible economic sanctions against Russia, and the UN Security Council held an emergency meeting on Ukraine on Friday after Kiev dispatched forces to retake a separatist stronghold.
Almost 140 companies reported earnings during the week. About 76 percent of those that have posted results this season have beaten analysts’ estimates, data compiled by Bloomberg show. More than 52 percent of them have topped sales projections, the data showed.
Yahoo, whose share price doubled last year, rose 6.9 percent to US$36.87 this week, while Netflix Inc added 5.8 percent to US$340.65 as the Dow Jones rose 1.4 percent following a 4.2 percent drop in the previous week.
The NASDAQ Composite rebounded after disappointing results from Amazon.com Inc on April 24 triggered a selloff in technology shares. The technology-heavy gauge fell in four of the previous five weeks amid concern valuations have outpaced estimates for earnings growth. NASDAQ companies trade at 35 times reported earnings, double the level of S&P 500 members.
Apple Inc rallied 3.6 percent to US$592.58, extending gains from the previous week after reporting surging sales of iPhones and setting plans to increase its share repurchase authorization by US$30 billion, boost its dividend and split its stock 7-for-1.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
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