Stocks rallied sharply on Friday, setting aside concerns that the rally that began this month was beginning to lose steam. The surge Friday took the Dow industrials towards the 11,000 mark even as the average appeared set to record its best September in more than 70 years. All major averages recorded their fourth straight weekly gain and closed at their best level in four months.
Investors welcomed a report that said orders for durable goods rose more than expected in August. The report set off a surge in stocks. The rally intensified after another report showed a jump in August corporate spending. Gold prices briefly touched the $1300 mark before retreating a little and settling at $1296. Prices of Treasury bonds and the dollar slipped. The yield on the benchmark 10-year note jumped to 2.61%
On Friday, the Dow Jones industrial average jumped 198 points, or 1.9%, to close at 10,860.26. The average is up 8.4% in September. In a month that is traditionally weak for stocks, the 30-share index is inching towards its best performance since 1939. On the week, the DJIA rose 2.4%, the NASDAQ 2.8%, and the S&P500 gained 2.1%. The market’s measure of volatility, the CBOE Vix, dropped more than 9% to below 22.
All 30 DJIA components marked gains on the day. Leading the Dow higher were Caterpillar (NYSE:CAT), Alcoa (NYSE:AA), General Electric, (NYSE:GE), Bank of America (NYSE:BAC), and Boeing (NYSE:BA), all recording gains of more than 3% on the session.
All ten S&P 500 industry sectors recorded gains on Friday, with the index breaking past the key technical mark of 1130. For the week the index gained 2.1%, and is up 9.5% so far this month. The session’s rally was led by more than 2% gains in industrial and financial sectors (+2.7%), basic materials and consumer services (+2.4%), oil and gas (+2.1%). Only financials gained less than 1% on the week. Jefferies’ (NYSE:JEF) 46% drop in third-quarter net profits on slow trading activity weighed on the financials. Also, Deutsche Bank (NYSE:DB) warned of “significantly lower” third quarter earnings versus a year ago.
With no significant event scheduled for the day, this morning’s stock futures are trading flat. Investors are likely to parse Wal-Mart (NYSE:WMT) $4.6 billion bid for South African Massmart and Unilever’s (NYSE:UL) $$3.7 billion offering for US consumer goods manufacturer Alberto Culver (NYSE:ACV).
ALCOA INC (AA): Free Stock Analysis Report
BOEING CO (BA): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
CATERPILLAR INC (CAT): Free Stock Analysis Report
DEUTSCHE BK AG (DB): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
JEFFERIES GP-NW (JEF): Free Stock Analysis Report
Zacks Investment Research
