Stocks Rise at the End of a Rough Week; Nike Jumps
The U.S. stock market bounced back Friday as investors welcomed good news on the U.S. economy at the end of a turbulent week of trading. Nike jumped after turning in higher profits, leading the Dow Jones industrial average higher.
KEEPING SCORE: The Dow was up 178 points, or 1.1 percent, to 17,124 as of 2:57 p.m. Eastern. The Standard & Poor’s 500 index rose 17 points, or 0.9 percent, to 1,983 and the Nasdaq composite climbed 46 points, or 1percent, to 4,512.
The S&P 500, the benchmark for most mutual funds, remains on track to lose 1 percent this week. The biggest drop came Thursday, the worst day for the stock market since July 31.
A VIEW: A steep drop one day is often followed by gains the next as investors hunt for beaten-down stocks. “After yesterday, it’s only normal to get a little bit back because people tend to buy on the dips,” said Jason Pride, director of investment strategy at Glenmede Trust.
Pride said he expects the market to resume its climb as the economy improves. “I think we’ll continue to grind higher because the economic momentum is still there,” he said. “Maybe the market gets overvalued. So, sometimes a little breather is helpful.”
SURPRISE: After a dismal winter, the U.S. economy expanded at an annual rate of 4.6 percent in the spring, the fastest pace in more than two years, the government reported Friday. Some economists expect the momentum to carry through the rest of the year.
SWOOSH: Late Thursday, Nike said its quarterly net income surged 23 percent thanks to solid sales and lower taxes. Both its earnings and revenue beat Wall Street’s estimates. Nike’s stock gained $9.68, or 12 percent, to $89.41, the largest gain among the 30 big companies in the Dow.
MOVING ON: Famed bond-fund manager Bill Gross, a founder of bond giant PIMCO, is leaving to join Janus Capital. Janus said Gross, who ran the world’s largest bond fund at PIMCO, starts work next Monday. Janus soared $4.17, or 38 percent, to $15.28.
CAJOLING: An investment fund with a stake in Yahoo sent a letter to Yahoo’s CEO urging the company to consider merging with AOL. Jeffrey Smith, who heads Starboard Value, wrote that a deal could save as much as $1 billion and create a more competitive company. Yahoo climbed $1.59, or 4 percent, to $40.53.
EUROPE: Major markets in Europe were mixed. Germany’s DAX slipped 0.2 percent and France’s CAC 40 gained 0.9 percent. Britain’s FTSE 100 index picked up 0.1 percent.
CURRENCIES: The dollar strengthened to 109.10 yen from 108.56 yen in late trading Thursday. The euro fell to $1.2729 from $1.2760.
BOND MARKET: Prices for U.S. government bonds fell, nudging yields up. The yield on the 10-year Treasury note rose to 2.54 percent from 2.50 percent late Thursday.
METALS: In commodity trading, precious and industrial metals made slight moves. The price of gold fell $6.50 to settle at $1,215.40 an ounce. Silver slipped 10 cents to $17.54 an ounce. Copper was little changed at $3.03 a pound.
OIL: Benchmark crude oil for November delivery rose $1.01 to $93.54 a barrel on the New York Mercantile exchange.