- The Washington Times - Saturday, May 30, 2009

Stocks rallied again Friday with help from a late-day surge, notching the first three-month advance since 2007 as investors bet on economic recovery.

The Dow Jones Industrial Average rose 96.53, or 1.2 percent, to 8,500.33. The Standard & Poor’s 500 Index gained 12.31, or 1.4 percent, to 919.14, while the Nasdaq Composite Index rose 22.54, or 1.3 percent, to 1,774.33.

The gains followed a Commerce Department report confirming that the economy shrank in the first quarter but not as much as first reported.

Gross domestic product fell at a revised 5.7 percent pace in the first quarter, better than the initial estimate of a 6.1 percent decline but a bit worse than the 5.5 percent economists had forecast. GDP represents the output of U.S. goods and services.

The S&P; 500 is up 1.8 percent this year after surging 36 percent from a 12-year low in March on encouraging global economic reports and corporate profits.

Transportation, financial and commodity stocks led Friday’s advance.

“We continue to see reports globally that things are getting better economically,” James Paulsen, chief investment strategist at Wells Capital Management, told Bloomberg News. “Basic materials and raw-materials stocks continue to move higher, driven by a weaker U.S. dollar.”

The jump in the final half-hour was “sort of window dressing at the end of the month,” he said.

The dollar fell below $1.41 a euro for the first time this year, while oil prices closed above $66 for the first time since January. Light, sweet crude rose $1.23 to settle at $66.31 a barrel on the New York Mercantile Exchange. Precious metals prices also advanced.

U.S. Treasuries rose, pushing interest rates lower. The yield on the 10-year Treasury note, which moves opposite its price, fell to 3.47 percent after hitting a six-month high of 3.75 percent on Wednesday.

McLean-based credit-card issuer Capital One Financial jumped $1.17, or 5 percent, to $24.44. Wells Fargo rose 73 cents, or 3 percent, to $25.50.

Copper giant Freeport-McMoRan gained 4.3 percent to $54.43. Gold producer Newmont Mining added 3.2 percent to $48.87.

Burlington Northern Santa Fe Corp. rose nearly 5 percent to $72.44. Union Pacific Corp. soared 8 percent to $49.27.

Analysts are uncertain about how the markets will react if General Motors Corp. files for bankruptcy Monday as expected.

GM stock closed at 75 cents, down 37 cents, or 33 percent. Common stockholders are typically wiped out in bankruptcy, but GM shareholders are expected to receive a 1 percent equity stake in the new company when it emerges from bankruptcy.

Asian and European stocks gained on strong economic reports from Japan and India.

Japan’s Nikkei stock average rose 0.8 percent. Britain’s FTSE 100 added 0.7 percent, Germany’s DAX index gained 0.2 percent, and France’s CAC-40 rose 0.4 percent.

For the week, the Dow gained 2.7 percent. The S&P; 500 jumped 3.6 percent. The Nasdaq fared the best, rising 4.9 percent.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide