NEW YORK (AP) - Wall Street bounded higher Friday, hurtling the Dow Jones industrial average to a record close approaching 13,000 as investors celebrated a week of surprisingly strong earnings reports. The major indexes all had their third straight winning week, their longest such streak since October.
Investors who had tempered their expectations for first-quarter earnings at the beginning of the week were energized Friday by the initial wave of upbeat results. So far into the earnings season, 16 of the 30 Dow components have posted financial results for the first three months of the year—with 10 surpassing analyst forecasts. Dow components Honeywell International Inc., Caterpillar Inc., Pfizer Inc., and McDonald’s Corp. all reported earnings Friday.
Better-than-expected results allowed stocks to extend their best April rally in four years, and one that pushed the Nasdaq composite index and the Standard & Poor’s 500 index to six-year highs.
“It’s not a matter of 13,000 for the Dow, we could be looking at 14,000 by the end of the year,” said Robert Froehlich, chief investment strategist for investment firm DWS Scudder. “There’s too much money out there chasing too few companies. This story isn’t ending anytime soon.”
According to preliminary calculations, the Dow closed up 153.35, or 1.20 percent, at 12,961.98, after setting a new intraday high of 12,966.29. The blue-chip index has hit 34 record closes since the beginning of October last year.
The S&P 500 index soared 13.62, or 0.93 percent, to 1,484.35, and the Nasdaq rose 21.04, or 0.84 percent, to 2,526.39.
For the week, the Dow surged 2.8 percent, the S&P 500 added 2.2 percent, and the Nasdaq rose 1.4 percent. Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.95 billion shares.
Bonds held steady as many investors focused on stocks. The yield on the benchmark 10-year Treasury note was unchanged at 4.67 percent. The dollar was mixed against other major currencies, while gold prices spiked.
Oil prices rose ahead of the presidential election in Nigeria, which is Africa’s top producer of crude. A barrel of light sweet crude rose $1.55 to settle at $63.38 on the New York Mercantile Exchange.
The abundance of relatively benign economic data released this week contributed to investors’ buying mood. New data indicated that builders picked up the pace of construction of new homes last month, and that there was a modest increase in core inflation.
Federal Reserve Governor Frederic Mishkin said in a speech Friday it might take a couple of years for inflation to ease to levels that the Fed is comfortable with, which could mean that the central bank won’t be cutting rates anytime soon.
Either way, Wall Street theorized this week that central bankers did not see enough evidence in recent reports that would force a change in policy. And that set up earnings to be a key catalyst for stocks.
** “The main impetus has been, most of the bears and the gloom-and- doomers thought that first-quarter earnings would stink. Once again, the gloomy Guses have been proven wrong,”** said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc. in St. Louis.
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