US stocks rose for a fifth straight week, sending the Standard & Poor’s 500 Index and the Dow Jones Industrial Average to their highest closes in 18 months, amid fresh signs the economy is recovering.
Energy companies led the advance as crude oil exceeded US$84 a barrel for the first time since October 2008. Commodity producers rallied as a decline in the value of the US dollar lifted prices for gold, copper and aluminum. 3M Co, the maker of 55,000 products from Post-It Notes to respiratory masks, gained after Morgan Stanley said an improved profit forecast from Danaher Corp was a positive sign.
The S&P 500 rose 1 percent in the holiday-shortened week to 1,178.10, completing its longest streak of weekly gains in almost a year. The Dow increased 76.71 points, or 0.7 percent, to 10,927.07. While stock exchanges were closed on Friday for Good Friday, futures on the S&P 500 rose 0.3 percent to 1,177.30 after US Labor Department data showed employers last month added the most jobs since 2007.
The tech-heavy NASDAQ composite rose 0.31 percent to 2,402.58.
“To stay at these levels or move higher, you’re going to need to see continuing evidence the economy is gaining momentum and continuing to improve,” said Robert Schaeffer, a money manager at Becker Capital Management Inc in Portland, Oregon.
US payrolls rose by 162,000 last month, less than anticipated, after a revised 14,000 decrease in February that was smaller than initially estimated, figures from the US Labor Department in Washington showed on Friday. The increase for last month included 48,000 temporary workers hired by the government to help conduct this year’s census. The unemployment rate held at 9.7 percent.
“It’s a good, solid report,” US Treasury Secretary Timothy Geithner said in a Bloomberg Television interview in New York. “It shows we’re getting stronger, and the economy is now creating jobs.”
The S&P 500 rallied 4.9 percent during the first quarter, the biggest advance to start a year since 1998, after US GDP expanded at the fastest pace in six years. Shares in Japan, Sweden, Russia and Switzerland did best during the period among the 20 largest stock markets, with benchmarks rising at least 5 percent. Spain, China, Taiwan and Hong Kong did worst, falling 2.9 percent or more.
This week’s advance extended the S&P 500’s rebound from a 12-year low in March last year to 74 percent. Birinyi Associates Inc, which recommended buying stocks a year ago, raised its year-end forecast for the benchmark to 1,325 because of rallies by General Electric Co, Citigroup Inc and Microsoft Corp.
GE, the world’s biggest maker of jet engines, power-plant turbines and locomotives, and Microsoft, the world’s biggest software company, are among the 10 largest US companies by market value. Citigroup, the bank 27 percent owned by the US government, is the most active stock on the New York Stock Exchange this year by number of shares traded. Birinyi’s S&P 500 projection for this year compares with the 1,243 average estimate of 13 strategists surveyed by Bloomberg.
Expectations for a 30 percent increase in S&P 500 profits in the first quarter, according to Bloomberg data, were boosted by bigger-than-forecast increases in gauges of manufacturing activity and consumer confidence. S&P 500 profits increased in the fourth quarter after a record nine-quarter slump.
Alcoa Inc, traditionally the first Dow company to release results each quarter, is scheduled to report on April 12.
The Institute for Supply Management’s factory index, released on Thursday, climbed to 59.6, exceeding the most optimistic forecast in a Bloomberg News survey of 77 economists. The Conference Board said on Tuesday that its consumer confidence index increased to 52.5 from 46.4.
Energy companies in the S&P 500 rose 3.8 percent as a group, the most among the index’s 10 industries. Eight of the 10 biggest advances in the index were by fuel producers. Pioneer Natural Resources Co rose 12 percent to US$59.15. Denbury Resources Inc gained 11 percent to US$17.34. Rowan Cos climbed 11 percent to US$29.93.
Freeport-McMoRan Copper & Gold Inc, Newmont Mining Corp and Alcoa Inc led gains among commodity producers.
The Dollar Index, which measures the US currency against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell 1.1 percent. That pushed copper to a 20-month high and aluminum to the highest since January. Gold futures rose as high as US$1,129.10, the highest since March 18.
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