Wall Street wrapped up its fourth straight week of gains on Friday, reaching its highest levels in four months, despite jittery trade marked by a cautioning by the Federal Reserve.
The week ended with its strongest rally this month, even though trade volume remained low compared to previous years as investors still faced uncertainty over the US recovery.
“This is a very difficult period of time, it is open question as to how long it lasts,” said Dan Greenhaus, chief economist strategist at Miller Tabak.
Traders opened the week on a cheery note, with markets jumping after a report said the US economy had ended its most sustained downturn since World War II in June last year.
The announcement on the end of the recession “heartened investors,” analyst Gregori Volokhine of Meerschaert New York said.
The mood was then tainted after US Federal Reserve on Tuesday cautioned that the US economic recovery had slowed, vowing to take new stimulus measures if necessary, sparking concerns on Wall Street.
The Fed’s warning had an immediate impact on the US dollar, sending the euro higher from US$1.30 on Tuesday to US$1.34 on Friday.
Stock indexes took a second bashing on Thursday after the US Labor Department released figures showing that the number of Americans asking for unemployment benefits rose more than expected last week.
However, Friday saw a very strong rally on the back of manufacturing data, which, although being mostly negative, did offer some hope that a slow recovery was under way.
The week ahead will see new reports on jobless claims and consumer confidence, as investors try to gauge the strength of the US economy, which relies heavily on consumer purchases.
Friday’s ISM manufacturing index is expected to show a continued rise in the key sector that has been the driving power behind the country’s recovery.
For the week, the Dow Jones Industrial Average was up 2.38 percent to 10,860.26. The broader S&P 500 index gained 2.05 percent to 1,148.67.
The technology-rich NASDAQ composite index ramped up 2.83 percent to 2,381.22.
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