Another Triple-Digit Day for Stocks
KRISTINA PETERSON BRENDAN CONWAY
NEW YORK—U.S. stocks climbed as global turmoil scaled back after Libya declared a cease-fire and currency interventions helped send the yen lower, relieving pressure on Japan's economy and boosting hopes for the global recovery.
The Dow Jones Industrial Average rose 111 points, or 1%, to 11885, on track to post its fourth day of triple-digit moves.
Leading the measure, Cisco climbed 1.9% after announcing its first-ever cash dividend. General Electric, which designed the stricken reactors at the Fukushima Daiichi power plant and has become increasingly involved in the efforts to prevent a meltdown, rose 1.7%.
The Nasdaq Composite gained 0.5% to 2647. The Standard & Poor's 500-stock index added 0.7% to 1283, led by its industrials and materials sectors.
After tumbling for the week's first three days, stocks rose Thursday and climbed in early Friday trading. The latest gains came after Libyan Foreign Minister Musa Kusa said the Gadhafi regime had declared an immediate cease-fire in the wake of the United Nations resolution passed late Thursday.
In comments broadcast live from the foreign ministry in Tripoli, Mr. Kusa said the country would "respond positively" to the resolution and halt all military operations.
The Group of Seven moved during the global day to stem "excess volatility and disorderly movements" in the currency markets after the yen's dramatic swings this week, sending the dollar soaring against the Japanese currency. A stronger yen had dealt added pressure to Japan's economy by making its exports more expensive abroad. The intervention is expected to aid Japanese exporters and boost the country's recovery effort, cheering global investors.
"It suggests that the economic downturn in Japan may be moderated a little bit by a weaker currency," said David Joy, chief market strategist of Columbia Investment Management. "To have the third-largest economy have its economic prospects look a little brighter is important," he said.
Friday morning, the Federal Reserve confirmed it had bought dollars against the yen. The dollar kept most of its gains and recently traded at 81.23 yen, up from 78.95 yen late Thursday in New York. The dollar weakened against the euro, which was trading recently at $1.4131, up from $1.4022 late Thursday.
The currency interventions follow a week of tumultuous trading that briefly sent U.S. blue-chip stocks into negative territory for the year on Wednesday. On Friday, the Nasdaq hovered around its break-even point for the year, while the Dow is up 2.6% year to date and the S&P 500 is up 2% over the same period.
Investors said the market may have overreacted earlier in the week as the nuclear power crisis fanned anxieties about the global recovery.
The interventions in the currency market and the ebbing of violence in Libya are "allowing some of these outside issues to be dealt with in a way that allows investors to focus on underlying economic strength," Mr. Joy said.
The Nikkei Stock Average gained 2.7%. European markets also rose.
Among stocks in focus, Nike shed 9.4% after the athletic-shoe maker's fiscal third-quarter earnings rose 5.2%, but results missed analysts' expectations and the company said it will begin to raise its prices. Goldman Sachs cut its investment rating on the stock to "neutral" from "buy."
General Mills rose 1.7% after entering exclusive talks with PAI Partners and Sodiaal to buy interests in dairy products maker Yoplait for a little over €800 million ($1.12 billion).
Intuit said volume for its TurboTax federal tax-return improved this season versus a year ago, helping shares add 5.1%.
Crude futures fell to $101 a barrel, while gold futures gained 1.3%.
Demand for U.S. Treasurys was mixed. The two-year note was flat, while demand fell for the 10-year note, pushing its yield up to 3.26%.
No comments:
Post a Comment