Shares on Wall Street rose modestly on Friday, giving the major indexes a third week of gains.
Friday’s modest advance followed Thursday’s losses, which resulted in the Standard Poor’s 500-stock index breaking a five-day streak of record closing highs.
“Today it’s trying to get some stability from yesterday,” said Alan Lancz, president of Alan B. Lancz Associates, an investment advisory company in Toledo, Ohio.
The length of the recent rally has surprised many, and the upward momentum may be difficult to sustain without further trading catalysts like first-quarter earnings reports, which are nearing an end. Still, investors expect shares to generally trend higher, given the Federal Reserve’s accommodative monetary environment and encouraging data on the labor market, including jobless claims on Thursday and last week’s payroll report.
“Between the jobs report, quantitative easing and a zero percent interest rate policy,” said Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Fla., “there’s no question that there’s a floor under the market and that it wants to go up, even if some sectors are overdone.”
Shares fluctuated for much of the day on Friday, but closed slightly higher. The S.P. 500 finished up 0.4 percent, while the Dow Jones industrial average gained 0.2 percent and the Nasdaq 0.8 percent.
“We’re seeing a real rotation out of defensive names and into groups like technology and industrials,” said Mr. Bertelsen, who helps oversee $2 billion in assets. “That’s keeping the market moving and preventing it from plateauing.”
Priceline.com reported first-quarter earnings late Thursday that beat expectations, though its second-quarter outlook disappointed. Shares moved 3.9 percent higher on Friday. The company’s earnings report was among several stronger-than-expected profit reports this week that helped stocks, despite coming near the end of the first-quarter earnings period.
Gap, the clothing retailer, rose 5.6 percent after reporting strong results.
Oil and gold prices tumbled as the dollar continued to get stronger against the yen and the dollar index was on track to post its strongest week in 10 months, making commodities more expensive for holders of different currencies and weighing on shares in the energy and basic materials sectors.
As of Friday morning, with 89 percent of the S.P. 500 companies having reported earnings, 66.7 percent have beat profit expectations, above the average since 1994 of 63 percent. However, only 46.4 percent of companies have beaten revenue expectations, well under the average since 2002 of 62 percent.
Carl Icahn, the activist investor, and Southeastern Asset Management proposed an alternative to a $24.4 billion buyout deal for Dell that involved giving shareholders an option to receive either $12 a share in cash or $12 in additional shares valued at $1.65 each. Shares of Dell rose almost 1 percent on Friday.
Article source: http://www.nytimes.com/2013/05/11/business/daily-stock-market-activity.html?partner=rss&emc=rss