U.S. stocks rose for a fourth straight day, pushing the Standard & Poor’s 500-stock index back into positive territory for 2011, as investors cheered the accelerating U.S. economy and a break in the latest Congressional deadlock.
The Dow Jones Industrial Average gained 86 points, or 0.7%, to 12255 in midday trade. The Standard & Poor’s 500-stock index rose eight points, or 0.7%, to 1262 and the Nasdaq Composite advanced 14 points, or 0.5%, to 2613.
The gains put the blue-chip index on pace for a fourth consecutive gain, and on track to close at its highest level in six months. Friday’s move came after three days that have seen the Dow tack on 403 points, or 3.4%, even as volumes remain light ahead of the three-day Christmas weekend.
With the gains, the S&P 500 pushed back into positive territory for 2011. With just four full sessions remaining after today’s closing bell, the broad market measure could join the Dow in the green for the year, potentially frustrating fund managers who have lagged the market.
Investors were encouraged by a break in the latest Congressional deadlock, after lawmakers in the House of Representatives and the Senate voted to temporarily extend a payroll tax cut by two months and agreed to begin negotiations on a yearlong extension.
They also welcomed economic news confirming the belief that the U.S. recovery is on track.
Leading the gains were telecommunications and utilities stocks. Bank of America gained 2.4% to lead the Dow components, while AT&T rose 0.8% and Verizon Communications advanced 1.5%.
European markets were broadly higher Friday, with the Stoxx Europe 600 up 0.9% to bring its weekly gain to 3.5%. The positive tone set by recent strong U.S. data and the Italian Senate’s backing of Prime Minister Mario Monti’s austerity package on Thursday helped buoy sentiment.
Asian bourses also rallied, with China’s Shanghai Composite gaining 0.9% to post its first gain in five sessions and South Korea’s Kospi climbing 1.1%.
Gold futures slipped to below $1,610 an ounce, while crude oil futures edged higher to just short of $100 a barrel. The U.S. dollar rose against the euro and lost ground to the yen.
In economic news, a raft of economic data showed U.S. consumers spending a bit more amid small income gains and low prices.
Durable goods orders jumped 3.8% in November, topping expectations, but a key barometer of the report–new orders for non-defense capital goods excluding aircraft–dropped 1.2% for a second straight decline.
Personal consumption expenditures and U.S. incomes each grew by 0.1% in November, beating expectations for 0.2% increases. Core personal consumption expenditure prices ticked up 0.1%, in line with expectations. New home sales totaled 315,000 in November, in line with expectations.
EasyForexNews Research Team