NEW YORK: U.S. stocks rose Friday, with the major indexes finishing with weekly gains, as upbeat consumer confidence and manufacturing data countered concern about government-spending cuts.
Federal Reserve Chairman Ben Bernanke’s reiteration this week that monetary stimulus would continue to help support equities, with the Dow Jones industrial average on Thursday coming within 15 points of its all-time closing high hit on Oct. 9, 2007.
“It’s the great bull market that no one believes in,” Alan Skrainka, chief investment officer at Cornerstone Wealth Management, said of equities nearing all-time highs.
On Friday, the Dow ended 75 points from its record finish, recovering from a 116-point drop after a report by the Institute for Supply Management, which said its manufacturing index accelerated in February, rising to 54.2 percent from 53.1 percent the month before.
Up 0.3 percent for the week, the Dow industrials added 35.17 points, or 0.3 percent, to 14,089.66.
The S&P 500 index advanced 3.52 points, or 0.2 percent, to 1,518.20, with health care faring best and industrials leading declines among its 10 major sectors. The index posted a 0.2 percent weekly gain.
Groupon Inc. rallied nearly 13 percent a day after the daily-deals provider fired its CEO after a disappointing quarter.
Groupon fired Andrew Mason on Thursday, one day after the company reported another disappointing quarter amid worries that people are tiring of the restaurant, spa and Botox deals that Groupon built its business on.
In a refreshingly candid memo to staff, Groupon CEO Andrew Mason admitted he “failed at this part of the journey” and said the company’s employees “deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance.”
Mason’s firing has been “fairly widely expected” given the company’s performance, and the surprise was how long it took, Gartner analyst Michael Gartenberg said.
Gap Inc. shares gained 2.9 percent after the clothing retailer tallied fourth-quarter profit that exceeded estimates.
Salesforce.com Inc. gained 7.8 percent after posting better-than-anticipated results for its fourth quarter.
The Nasdaq composite index climbed 9.55 points, or 0.3 percent, to 3,169.74, leaving it 0.3 percent higher for the week.
For every three stocks that declined, roughly four gained on the New York Stock Exchange, where 743 million shares traded. Composite volume neared 3.7 billion.
Late in Thursday’s session, a Senate vote kept the $85 billion in automatic federal budget reductions in play, with U.S. stocks giving up gains in the last moments of the trading session.
A Friday meeting between President Barack Obama and congressional leaders concluded without an agreement on breaking the impasse over the cuts.
Without a deal, Obama is mandated by midnight to order federal agencies to cut their budgets to reach an $85 billion reduction between Saturday and Oct. 1.
With the sequester cuts coming, at least temporarily, the next chance to turn them off could be the expiration of a stopgap government funding bill on March 27.
“The cuts really don’t happen until April in earnest, so this is the time to solve this problem,” Jim Russell, chief equity strategist for U.S. Bank Wealth Management, noted Thursday in a telephone interview.
“Whether through sequestration, or a more surgical, thoughtful process, we get spending cuts, or revenue and spending cuts, and either way, the markets will tend to like that,” Russell added.
Friday’s economic data had the University of Michigan-Thomson Reuters consumer-sentiment gauge rising to a final February reading of 77.6, the highest level since November.
Separately, the government reported U.S. consumer spending rose in January even as incomes fell.
Ahead of the U.S. market opening, data showed Chinese manufacturing slowing.