Rising U.S. stocks spark economic optimism
U.S. stocks rose last week, snapping three weeks of declines, as better-than-estimated growth in private employment and manufacturing raised optimism that the economy will avoid a recession.
The S&P 500-stock index advanced 3.8 percent to 1104.51, the biggest weekly gain since the period that ended July 9. The Dow Jones industrial average gained 297.28 points, or 2.9 percent, to 10,447.93, after losing 4.7 percent in the three weeks prior.
Caterpillar, Alcoa and General Electric rallied more than 4.6 percent. Bank of America and J.P. Morgan Chase advanced at least 6.8 percent as the Federal Deposit Insurance Corp. said U.S. lenders posted their biggest quarterly profit in almost three years.
"Investors are breathing a sigh of relief," said Peter Sorrentino, who helps oversee $13.3 billion at Huntington Asset Advisors in Cincinnati. "The jobs report was a pleasant surprise. Companies are adding capacity. The retail numbers were encouraging and show the consumer is not continuing to retrench. We're not going to spiral downward from here. It all sets a positive tone for the stock market."
The S&P 500 rallied for four consecutive days, the longest winning streak in seven weeks. Its loss since reaching a 19-month high in April dropped to 9.3 percent. The Treasury will sell $30 billion in three-month and $30 billion in six-month bills Tuesday.
They yielded 0.14 percent and 0.18 percent, respectively, in when-issued trading. The U.S. government also plans to sell $33 billion in three-year notes Tuesday, $21 billion in 10-year Treasury notes the next day and $13 billion in 30-year bonds Thursday. They yielded 0.82 percent, 2.72 percent and 3.80 percent in when-issued trading.
-- Bloomberg News