Financial Markets: Stocks extend rally to fourth week; energy recovers
NEW YORK >> Stocks closed higher on Wall Street, capping a four-week rally.
Energy companies were among the biggest gainers Friday as energy prices continued to recover. Devon Energy surged 11 percent and Anadarko Petroleum added 9 percent.
Bank stocks also rose sharply. That sector had been beaten down in recent weeks as investors worried about loans to highly leveraged energy companies going bad.
The gains nearly brought the market back to breakeven for the year.
The Dow Jones industrial average rose 218 points, or 1.3 percent, to 17,213.
The Standard & Poor's 500 index gained 32 points, or 1.6 percent, to 2,022. The Nasdaq composite climbed 86 points, or 1.9 percent, to 4,748.
U.S. crude added 68 cents, or 1.8 percent, to $38.52 per barrel on the New York Mercantile Exchange after the International Energy Agency said "there are signs that prices might have bottomed out." U.S. crude has risen 47 percent from a 13-year low of $26.21 exactly one month ago. Brent crude, which is used to price international oils, gained 41 cents, or 1 percent, to $40.46 a barrel.
Make it four
After a scary stock drop earlier this year amid talk of a possible U.S. recession, investors have gotten more confident. If Friday's rally holds to the close, the S&P 500 will notch its fourth weekly gain in a row. Since it hit a low on Feb. 11, the index has gained 9 percent.
It's been a "terrific four-week run," said Chief Equity Strategist Phil Orlando of Federated Investors, but that makes him a "little nervous." Among his worries are a steeper China slowdown, a U.S. dollar strengthening even more and hurting U.S. exports, no relief from the corporate profits drop over the last year and more surprises in the presidential election. "Don't discount the fiscal policy uncertainty of the election," he warned.
European markets rose sharply as investors hoped that the European Central Bank's latest blast of stimulus policies would help revive the region's economy. Germany's DAX gained 3.5 percent, France's CAC 40 advanced 3.3 percent and Britain's FTSE 100 rose 1.7 percent. Shares in banks, which will be supported by the ECB loans, were among the biggest gainers.
Stocks had fallen on comments by ECB chief Mario Draghi on Thursday that underscored the weakness of the 19-country eurozone economy and the desperation of monetary authorities to act. The ECB moves included three interest rate cuts, loans to banks, and an expansion to a bond-buying stimulus program.
Japan's Nikkei 225 gained 0.5 percent. South Korea's Kospi edged up 0.1 percent and Hong Kong's Hang Seng index was up 1.1 percent.
The dollar strengthened to 113.67 yen from 113.11 yen while the euro fell to $1.1164 from $1.1196.
U.S. government bonds fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 1.98 percent from 1.93 percent late Thursday.
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