NEW YORK, N.Y. – Stocks rose on Friday in a modest, but broad rally that erased much of the losses from earlier in the week when investors had sold over fears of rising interest rates.
Health care and technology stocks rose the most, helping to nudge the Standard and Poor’s 500 index back to slight gains for the week and year. Nine of the index’s 10 sectors closed higher.
Stocks rose from the start of trading, following sizable gains in Europe. Among the winners, Intel climbed nearly 2 per cent and Pfizer closed up 1.1 per cent.
Investors were spooked earlier in the week when the Federal Reserve released minutes of its last meeting that suggested it may raise rates in June, something the market had not expected. They scrambled to readjust portfolios, dumping oil and copper, U.S. Treasury bonds and stocks of steady dividend payers like utilities that tend to fall when rates rise.
But on Friday a measure of calm returned. U.S. bonds barely moved, commodities ended mixed and utilities rose, albeit just 0.2 per cent.
The S&P 500 rose 12.28 points, or 0.6 per cent, to 2,052.32. The Dow Jones industrial average ended the day up 65.54 points, or 0.4 per cent, to 17,500.94. The Nasdaq composite climbed 57.03 points, or 1.2 per cent, to 4,769.56.
Applied Materials led the move higher in technology stocks. The maker of chipmaking equipment jumped $2.75, or 14 per cent, to $22.66 after reporting earnings ahead of analysts’ forecasts.
Another big gainer for the day, Interoil, jumped $11.92, or 38 per cent, to $43.57 after rival Oil Search announced a deal to buy the company for $2.2 billion. The deal still needs approval by shareholders.
Friday’s gains notwithstanding, the major indexes have barely moved this year.
Steven Ricchiuto, chief economist at Mizuho Securities, says investors are uncertain about the strength of the economy and that’s reflected in their unwillingness to commit themselves to buying.
“There’s no conviction,” he said. “There is no upside momentum.”
Jim Paulsen, chief investment strategist for Wells Capital Management, thinks investors will eventually come around. He said he welcomes Fed talk of a rate increase because it shows things are getting better.
“The economy is good enough that even the Fed thinks it might be able to raise rates,” he said. “Job creation is there, unemployment is low.”
Among other stocks making big moves, Campbell Soup dropped $4.08, or 6 per cent, to $59.90 after reporting third-quarter sales that fell short of Wall Street expectations. The company partly blamed challenges in its V8 beverages business and problems with its fresh carrot supply.
The clothes chain Gap rose 73 cents, or 4 per cent, to $18.01 after announcing late Thursday that it’s closing 75 Old Navy and Banana Republic stores outside North America. The announcement came as the clothes retailer reported a 47 per cent drop in first-quarter profits and lower revenue.
In Europe, stock markets reversed losses from the previous day. Britain’s FTSE 100 was up 1.7 per cent while Germany’s DAX rose 1.2 per cent. France’s CAC 40 advanced 1.7 per cent.
Japan’s Nikkei 225 rose 0.5 per cent while South Korea’s Kospi was flat. Hong Kong’s Hang Seng index rose 0.8 per cent. Australia’s S&P/ASX 200 gained 0.5 per cent.
Benchmark U.S. oil fell 33 cents at $48.34 a barrel in New York. Brent, used to price international oils, lost 4 cents to $48.68 a barrel in London.
In other energy markets, wholesale gasoline inched up to $1.64 a gallon. Heating oil rose 1 cent to $1.49 a gallon. Natural gas rose 2 cents to $2.06 per 1,000 cubic feet.
Bond prices rose slightly. The yield on the 10-year Treasury note held steady at 1.85 per cent. The euro rose to $1.1219 from $1.1202, while the dollar rose to 110.23 yen from 109.89 yen.
Metals prices were mixed. Gold fell $1.90 to $1,252.90 an ounce. Silver added 4 cents to $16.53 an ounce. Copper remained at $2.06 a pound.