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Stocks rise to record highs on GDP report

Bloomberg News

NEW YORK: Stocks rose on Friday, with the Standard & Poor’s 500 index capping its biggest weekly gain since October, as data showing faster-than-estimated growth boosted confidence in the world’s largest economy.

Red Hat Inc. surged 14 percent as the software company raised its full-year profit and sales forecasts. Responsys Inc. jumped 40 percent as Oracle Corp. agreed to buy the marketing company for $1.5 billion in cash. CarMax Inc. declined 9.4 percent as the largest U.S. seller of used cars posted earnings that missed analysts’ estimates.

The S&P 500 added 0.5 percent to a record 1,818.32. The Dow Jones industrial average rose 42.06 points, or 0.3 percent, to 16,221.14, also an all-time high. Futures and options contracts expired Friday in a process known as quadruple witching and the operator of the S&P 500 rebalanced the index in a quarterly move to adjust member weightings.

“The market is feeling somewhat confident,” said Robert Pavlik, chief market strategist in New York at Banyan Partners LLC, which manages about $4.5 billion. “It’s encouraging as an investor and consumer to see GDP get up to these levels. GDP reaching 4 percent makes you feel good about the economy and where we’re headed.”

The S&P 500 rose 2.4 percent this week, halting a string of two weekly declines and erasing a loss for the month, after the Federal Reserve’s decision to slow the pace of its stimulus boosted investor confidence that the recovery in the world’s largest economy is on course. The Dow’s weekly advance of 3 percent was its biggest since September.

The S&P 500 has rallied 27 percent so far in 2013, on course for its best performance since 1997.


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