Wall Street stocks snap six-week slide
More News from Agence France-Presse
NEW YORK — US stocks solidly snapped a six-week slide Friday with gains topping three percent, the best rise in five months.
In the holiday-shortened week, the Dow Jones Industrial Average jumped 3.35 percent in four trading sessions to finish Friday at 13,009.68 points.
The tech-rich Nasdaq leaped 3.99 percent to 2,966.85.
And the Standard & Poor’s 500-stock index, a broad measure of the markets, gained 3.62 percent at 1,409.15.
The Thanksgiving Day holiday that shuttered US markets Thursday and shortened the session Friday also gave a break to Congress ahead of negotiations with the White House on the fiscal budget.
Unless President Barack Obama and Democratic and Republican lawmakers can reach a compromise to avoid the fiscal cliff in January, the severe mandatory spending cuts and tax increases were predicted to tip the country back into recession.
“US stocks rallied this shortened trading week as optimism grew that a deal to avoid the fiscal cliff could be reached,” said IHS Global Insight economists Paul Edelstein and Nigel Gault.
The week featured housing data that pointed to a recovery finally gaining traction in the depressed sector more than six years after the market crashed.
Federal Reserve chairman Ben Bernanke, in a speech Tuesday to the Economic Club of New York, warned that the looming fiscal cliff posed a “substantial threat” to US economic recovery.
On Friday stocks rallied sharply as consumers thronged to stores hunting for bargains on Black Friday, the traditional kick-off to the year-end holiday shopping season.
Consumer spending drives about 70 percent of the economy’s activity.
Consumers “seem enthusiastic enough” according to the latest numbers on household confidence, said Gregori Volokhine at Meeschaert New York.
“Next week Congress gets back in session, President Obama will be back in the White House (and) many people will be watching whether there is any development on the fiscal cliff talks,” said Andrew Fitzpatrick at Hinsdale Associates.
In the week ahead, investors will keep an eye on a meeting Monday of eurozone finance ministers and other creditors of debt-ravaged Greece to see whether Athens will finally get its much-delayed installment of bailout aid.
“That will be something important for Wall Street to study — the sentiment is that work will get done on Monday,” Fitzpatrick said.
The rest of the week will be packed with indicators because it is the last week of the month and will include data postponed by the Thanksgiving holiday, FTN Financial analysts noted.
Among them will be durable goods orders and consumer confidence on Tuesday, and the Fed’s Beige Book report on economic conditions Wednesday.
On Thursday, the government will publish its second estimate of third-quarter economic growth and weekly unemployment claims. The National Association of Realtors releases pending home sales numbers.
Personal income and spending data wind up the week’s calendar Friday.
All of the indicators, Volokhine warned, should be viewed with caution because “they are very influenced by Hurricane Sandy,” the disastrous superstorm that struck the northeast at the end of October and beginning of November.
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