An easing of worries regarding Greece’s fiscal problems helped US stock prices rise on Friday with all three main indices finishing the week higher for the sixth consecutive week.
“There’s been a dearth of key news this week so the market has mainly bounced around,” said Doug Roberts, chief investment strategist for Channel Capital Research. “People really want to see what the earnings results next week will be like. Many are still uncertain of this recovery.”
Small-cap stocks that are cheap relative to their earnings are best positioned to benefit from the current environment, he said.
The S&P 500 closed up 0.7 per cent to 1,194.37 on Friday and 1.4 per cent firmer on the week, while the Nasdaq Composite was 0.7 per cent higher at 2,454.05, advancing 2.1 per cent since the start of the week.
The Dow Jones Industrial Average gained 0.6 per cent to 10,997.35 and 0.6 per cent over the five days. All week the gauge has threatened to break the 11,000 level – the last time it achieved this was September 2008.
JC Penney rose 1.7 per cent to $31.52 on Friday as the department store chain was added to the “conviction buy” list at Goldman Sachs in spite of missing narrowly its March sales expectations. The broker raised its share price target from $32 to $37.
Alcoa moved 3.2 per cent lower on Friday to $14.39 as the stock was downgraded to “neutral” from “overweight” at JPMorgan Chase. The aluminium producer is set to kick off the official earnings season next week.
Chevron was up 2.4 per cent to $79.50 on Friday as the company said its first-quarter earnings were likely to be better than its fourth-quarter results but the oil company did not cite specific numbers.
Atlas Energy advanced 20.2 per cent to $38.25 on Friday on news that India’s Reliance Industries is to invest $1.7bn in a joint venture that will give it a 40 per cent stake in the Marcellus Shale gas project.
Constellation Brands, a global alcoholic beverages group, on Friday lost 2.5 per cent to $16.43 as it forecast lower full-year earnings estimates than analysts had forecast. It expects to make $1.53-$1.68 per share compared with consensus estimates of $1.77.
Rob Sands, chief executive, said the forecasts were because of “an uncertain economic environment, continuing pressures on the Crown joint venture and the Australian and UK operations”, as well as investments in marketing and technology. However, its profit for the past quarter beat expectations.
Walmart, the world’s largest retailer, lost 0.6 per cent on Friday to $55.07 on news that it had cut prices on more than 10,000 products. It follows a drop in sales in its US stores last quarter.
Media group AOL was up 10.4 per cent on the week to $27.99 after it announced a potential sale or shutdown of Bebo, the social networking website that it bought less than two years ago.
Bebo has been losing market share to rivals and analysts expect it to reach a significantly lower price than the $850m AOL paid.
Palm rallied 32.3 per cent over the week to $5.16 amid rumours that the smartphone manufacturer may be bought.
Speculation that HTC Corp, a Taiwan-based smartphone maker, may be a potential buyer sent the Palm shares 11 per cent higher on Friday. The company declined to comment.
Solid March sales figures released late in the week boosted retail stocks.
Over the week, clothing retailer Gap was 5.2 per cent higher at $24.85, department store chain Macy’s gained 5.2 to $23.51 and Nordstrom rallied 2.5 per cent to $42.55. All beat their analyst sales estimates.
Shares of coal producer Massey Energy slumped 11.9 per cent to $46.72 over the week following an explosion at its mine in West Virginia that killed at least 25 people.