US stocks rose on Friday as surging oil prices pushed energy shares higher and fresh economic data suggested key parts of the economy could be stabilizing.
The US factory sector contracted further in April, but at a slower pace, while consumers reported feeling more confident about the economy last month than at any time since September when Lehman Brothers collapsed, paralyzing the global financial system. Exxon Mobil Corp rose 2% to end at $68.01 and the S&P energy index gained 3% after crude oil futures settled above $53 a barrel.
“The energy stocks, if you can determine the word cheap, are reasonably priced,” said Carl Birkelbach, chairman and CEO of Birkelbach Investment Securities in Chicago. “If the economy is going to turn, which is what the market, the Fed and Obama are telling us, then naturally energy prices should go back up again,” he said.
The Dow Jones industrial average gained 44.29 points, or 0.54%, to 8,212.41 points. The Standard & Poor’s 500 Index rose 4.71 points, or 0.54%, to 877.52. The Nasdaq Composite Index edged up 1.90 points, or 0.11%, to 1,719.20 points. For the week, the Dow rose 1.7%, the S&P gained 1.3% and the Nasdaq ended up 1.5%.
The Nasdaq’s gains marked the eighth straight weekly advance for the index, it’s longest streak since December 1999. Limiting gains on Wall Street was American Express, down 3.7% to $24.29 as the top drag on the Dow, after it was reported that regulators delayed results of widely-anticipated stress tests, which aim to measure the strength of the 19 largest US banks.
Investors worried the delayed stress test results may mean bank balance sheets need even more capital. The news, which has fixated investors around the world, who are already concerned about the health of the US banking system, will be released late on Thursday afternoon, a government source said.
“There’s some apprehension about the stress tests next week and the fact that (the results) were pushed back I think is more of a negative sign,” said Michael James, a senior trader at Wedbush Morgan in Los Angeles.
McDonald’s shares were also among the top weights on the blue-chip index after Goldman Sachs removed the fast-food chain from its conviction buy list, although it affirmed its positive rating. McDonald’s shares fell 1.7% to $52.40.
MasterCard Inc, the world’s second-largest credit card network, was also among the laggards after it said revenues will grow less than expected in 2009. MasterCard shares were down 5.8% at $172.90.
On Nasdaq, the index was led higher by major technology companies such as Apple, up 1.1% to $127.24 and Research In Motion, up 4% to $72.30. Shares of Celgene were the biggest drag on the index, down 7.4% to $39.54, after it reported Q1 results that were in line with the company’s forecast, but the cancer drugmaker said that it expects its full-year earnings to come in at the low end of its previously announced range. The Amex Biotechnology Index slipped 1.6%. (Reuters)