US stocks rallied on Friday, lifted by gains in technology stocks and a retreat in US Treasury yields as the US Federal Reserve eased concerns about the path of interest rate hikes this year.
The US central bank, looking past the recent stock market sell-off and inflation concerns, said it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.
Investors largely expect the Fed to raise rates three times this year, beginning with its next meeting next month, the first under new Fed Chair Jerome Powell.
Photo: AFP
Traders see a 95.5 percent chance of a quarter-percentage-point hike next month, according to Thomson Reuters data.
“Certainly bond yields pulling back today is helpful for stocks, at least for the short term, that has been the narrative that is out there — that higher bond yields are weighing on stocks and this preoccupation with 3 percent,” said Willie Delwiche, investment strategist at Robert W. Baird & Co in Milwaukee. “So moving away from that, for today at least, provides a bid for equities.”
Powell’s first public outing is to be on Tuesday, when he is to testify separately before the US House of Representatives and Senate committees.
The Dow Jones Industrial Average on Friday rose 347.51 points, or 1.39 percent, to 25,309.99, the S&P 500 gained 43.34 points, or 1.6 percent, to 2,747.30 and the NASDAQ Composite added 127.30 points, or 1.77 percent, to 7,337.39.
For the week, the Dow rose 0.37 percent, the S&P advanced 0.56 percent and the NASDAQ gained 1.35 percent.
Benchmark 10-year US Treasury notes on Friday rose 13/32 in price to yield 2.8714 percent, from 2.917 percent late on Thursday.
The dip in yields helped boost bond proxy sectors, such as utilities, up 2.66 percent, and real estate, up 1.72 percent. The sectors have been among the worst performers so far this year on expectations of climbing rates.
Tech shares climbed 2.17 percent led by gains in Hewlett Packard Enterprise Co (HPE), which rose 10.5 percent, and HP Inc, up 3.5 percent.
The two companies created from the split of Hewlett Packard Co in 2015, reported strong results and HPE also announced a plan to return US$7 billion to shareholders.
Blue Buffalo Pet Products Co jumped 17.23 percent after General Mills Inc said it would buy the natural pet food maker for US$8 billion.
General Mills was the biggest percentage decline on S&P 500, falling 3.59 percent.
Advancing issues outnumbered declining ones on the New York Stock Exchange by a 4.54-to-1 ratio; on NASDAQ, a 2.82-to-1 ratio favored advancers.
The S&P 500 posted 10 new 52-week highs and one new low; the NASDAQ Composite recorded 64 new highs and 57 new lows.
Volume on US exchanges was 6.05 billion shares, well below the 8.38 billion average over the past 20 trading days.
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