A trader laughs as he stands on the main trading floor of the New York Stock Exchange near the end of the trading session in New York July 19, 2006. U.S. stocks rallied on Wednesday, realising their biggest one-day percentage gain in three weeks, as the Federal Reserve chairman's comments on inflation suggested the central bank may be close to ending two years of interest-rate increases. - reuters
NEW YORK, (Reuters):
United States stocks rallied on Friday as economic data bolstered hopes that the Federal Reserve may soon be done raising interest rates, and the S&P 500 recorded its best weekly gain since November 2004.
A sharp drop in oil prices also helped sentiment, easing worries about energy costs. The Dow's weekly rise was its best since May 2005, and all three major indexes ended the day more than one per cent higher.
Shares of rate-sensitive financial services companies Citigroup Inc., Wells Fargo & Co. and Bank of America Corp. were among the stocks giving the biggest lift to the Standard & Poor's 500 Index. Citigroup also led the Dow higher, along with American Express Co.
Government data on gross domestic product showed the economy slowed more than expected in the second quarter, lifting expectations that the Federal Reserve's two-year campaign of raising rates may be near an end.
"There are still signs of inflation out there, but the (GDP data) was weak enough to convince people that the Fed will have to pause," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco. "That's what opened the door for the broad-based advance."
The Dow Jones industrial average climbed 119.27 points, or 1.07 per cent, to end at 11,219.70. The Standard & Poor's 500 Index gained 15.35 points, or 1.22 per cent, to finish at 1,278.55. The Nasdaq Composite Index advanced 39.67 points, or 1.93 per cent, to close at 2,094.14.
Interest-rate policy
For the week, the Dow rose 3.23 per cent, the S&P 500 gained 3.08 per cent and the Nasdaq advanced 3.65 per cent. It was the best weekly percentage gain for the Nasdaq since early January.
The Fed's next meeting on interest-rate policy is August 8.
U.S. crude oil futures fell in a sell-off on the New York Mercantile Exchange, triggered by talk among traders that there might soon be a ceasefire in the conflict between Israel and the Hezbollah guerrillas in Lebanon.
On the Nasdaq, shares of Intel Corp. rose 4.1 per cent, or 71 cents, to settle at US$18.18, a day after the number one chip maker unveiled its new energy-saving computer chips.
The Philadelphia Stock Exchange index of semiconductors jumped three per cent, its biggest percentage gain in about three weeks.
"Any good news from a major player like Intel usually translates into good news for the sector," said Ray Rund, head of research with Shaker Investments in Cleveland, adding that semiconductor stocks "are starting to look cheap."
Taken from The Sunday Gleaner, July 30, 2006
