US stocks climbed for a third straight session on Friday in the wake of the US Federal Reserve’s lowered path for future interest rate increases. The gains lifted the broad-based S&P 500 into positive territory for the first time this year, rising 8.99 points (0.44 percent) to 2,049.58.
The Dow Jones Industrial Average gained 120.81 (0.69 percent) to 17,602.30, while the tech-rich NASDAQ Composite Index rose 20.66 (0.43 percent) to 4,795.65.
Analysts said the market continued to benefit after the Fed on Wednesday kept interest rates unchanged and scaled back projections for hiking them due to global growth worries.
“It was a huge gift to the market,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “I think the market was bracing for a more hawkish view.”
Following the Fed move, the US dollar weakened and drove up commodity prices. Oil rose above US$42 a barrel.
“People are realizing that this means a weaker dollar and that should benefit a lot of the stocks in the S&P and Dow, stocks with lots of exposure overseas,” said Kim Forrest, research analyst at Fort Pitt Capital Group in Pittsburgh.
Crude oil dipped on Friday as traders booked profits after strong seasonal demand and the US oil rig count rose for the first time since December.
Stronger-than-expected economic data, such as recent jobs and wages reports, and improved expectations for corporate earnings, have also eased recession fears and emboldened investors, Forrest said.
Contrary to sentiment in January and early last month, investors are beginning to think: “We are not experiencing a recession,” she said.
For the week, the Dow rose 1.8 percent, the S&P 500 gained 1.3 percent and the NASDAQ was up 1 percent. The CBOE volatility index, a gauge of what equity investors are willing to pay for protection against a drop on the S&P 500, closed at its lowest since early Aug. 18.
Starwood Hotels surged 5.5 percent after a group led by China’s Anbang Insurance Group Co (安邦保險集團) increased its bid for the US hotel chain to US$13.2 billion, and Starwood said it would cancel its earlier merger deal with Marriott International.
However, Marriott shares gained 1.9 percent, as the company would earn a US$400 million termination fee for the cancellation.
Banks had a good day with JPMorgan Chase and Bank of America both up 2.9 percent and Citigroup 1.6 percent.
Jeweler Tiffany gained 3 percent after it reported fourth-quarter earnings of US$1.46 per shares, US$0.06 above analysts’ expectations.
Software firm Adobe Systems rose 3.9 percent after reporting that first-quarter net income tripled from a year ago to US$254.3 million following a 24.7 percent rise in sales.
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