NEW YORK — Wall Street celebrated on Friday after tech companies and industrials powered US stock markets to five straight days of growth, despite continuing fears over Europe’s debt crisis.
The Dow Jones Industrial Average rose 4.7 percent for the week to close at 11,509.09, back above its closing level from August 5, just before Standard & Poor’s downgrade of the United States roiled global markets.
The last time that the Dow enjoyed five consecutive days of growth was in late June.
The S&P 500 gained 5.35 percent for the week to close at 1,216.01, while the tech-heavy Nasdaq Composite surged 6.25 percent to 2,622.31.
“We’ve seen good leadership in technology, in banks, in retails. This is positive. It has been a very constructive week,” said Marc Pado, US market strategist for Cantor Fitzgerald.
Strong performers included chipmaker Intel, up 11.5 percent; Apple, up 6.1 percent; and Cisco, the maker of networking hardware, up 5.1 percent over the past week.
Investors kept a wary eye the eurozone’s sovereign debt crisis, though, with markets reacting sharply to statements by European policymakers and developments in Greece’s ongoing debt drama.
Analysts warned that Wall Street’s bullishness rested on a weak foundation, noting that in addition to Europe’s woes, the US economy
was still suffering from stubbornly high unemployment and sluggish
growth.
“To really have a well-oriented market, we must see more visible US growth; there needs to be an improvement in the jobs market and the start of a solution in Europe, not just short-term or temporary measures,” said Gregori Volokhine, head of Meeschaert Capital Markets.
Next week, investors will be keeping a close eye on a two-day meeting beginning Tuesday of the Federal Open Market Committee, the key policy body of the US Federal Reserve, to see whether it takes action to boost the ailing economy.
Due to internal divisions, the FOMC is unlikely to take the drastic step of launching a third round of quantitative easing – effectively printing dollars to inject liquidity into the economy — but might
take less contentious steps, economists at IHS Global Insight said.
“We believe that more quantitative easing is too controversial for now… but that it will come eventually because we expect growth to remain weak and the unemployment rate to rise,” they said in a research note.
Markets will also be awaiting two data releases that will reveal how the US housing market fared in August: housing starts, scheduled for publication on Tuesday, and existing home sales, coming on Wednesday.