Financial Stocks Drive 5th Week of Gains
Stocks rose for a fifth straight week, capping the steepest rally since 1933, as Wells Fargo's higher-than-estimated earnings and investor speculation that banks will pass government stress tests spurred optimism that the industry's slump is ending.
Bank of America, American Express and J.P. Morgan Chase helped drive a gauge of 80 financial companies in the Standard & Poor's 500-stock index to a 9.4 percent advance. Wells Fargo surged 32 percent on Thursday when it reported that it would record first-quarter profit. Lincoln National spiked 50.7 percent and Principal Financial Group jumped 37.4 percent as the Treasury Department considered bailouts for life insurers.
"This was a really, really positive start to the earnings season," said Hugh Johnson, who oversees $750 million as chairman of Johnson Illington Advisors in Albany, N.Y. "Banks are not going to be forced to take the kind of write-offs they had to take in prior quarters."
The S&P 500 gained 1.7 percent, to 856.56. It has soared 27 percent since March 9, the steepest 23-session rise in 76 years. The Dow Jones industrial average added 0.8 percent, to finish the week at 8083.38. The Nasdaq increased 1.9 percent, to 1652.54.
U.S. exchanges were closed for Good Friday.
The S&P 500 is now down only 5.2 percent in 2009, compared with 25 percent as of March 9.
Wal-Mart retreated 5.8 percent, limiting the market's advance, after it reported March sales that increased less than analysts had estimated.
The Treasury will auction $28 billion of three-month bills and $27 billion of six-month bills tomorrow. They yielded 0.13 percent and 0.37 percent, respectively, in when-issued trading. One-month bills will be sold on Tuesday.
-- Bloomberg News