Wall Street rallies, S&P 500 briefly hits record

NDTV Profit Desk

21 Mar 2014, 10:06 PM IST

Wall Street's upward momentum continued on Friday, with major indices largely rising and the S&P 500 briefly climbing to a new record as energy and industrial names outperformed.

Both the Dow and S&P 500 are on track for their fourth day of gains out of the past five, and all three major indices are set to close out a week of strong gains.

Geopolitical issues remained in focus after President Vladimir Putin signed laws completing Russia's annexation of Crimea and investors took fright at a US decision to slap sanctions on his inner circle. Russia's MICEX stock index was down 1 per cent.

While some analysts say US equities are vulnerable to any escalation in geopolitical tensions with Russia, stocks were boosted by Moscow's assertion that no other Ukrainian region would be subject to intervention.

"The path of least resistance for markets is up, and so far it doesn't think the Ukraine issue is too big of a negative since no one really thinks that Putin will do anything too drastic," said Michael Matousek, head trader at US Global Investors Inc in San Antonio.

"Of course if things do heat up, it would really become a headwind for markets."

Companies tied to the pace of economic growth were among the biggest gainers Friday, with energy and industrial shares rallying. Joy Global Inc jumped 4 per cent to $57.38 while Halliburton Co was up 2.6 per cent to $58.84.

On the downside, Nike Inc late Thursday said growing pressures from weak emerging market currencies would take a toll on profit. The athletic apparel maker, which gets about 30 per cent of revenue from emerging markets, also said China sales would be unchanged or slightly down this quarter. Shares fell 3.3 per cent to $76.63.

The Dow Jones industrial average was up 110.11 points, or 0.67 per cent, at 16,441.16.

The Standard & Poor's 500 was up 9.23 points, or 0.49 per cent, at 1,881.24.

The Nasdaq Composite was down 3.34 points, or 0.08 per cent, at 4,315.95.

The S&P 500 briefly climbed to a record high of 1,883.97, just over its previous record of 1,883.57. If the index's current levels hold, that would represent a record close. For the week, both the Dow and S&P are up 2 per cent while the Nasdaq is up 1.4 per cent.

First Solar continued its recent meteoric rise, climbing 3.9 per cent on Friday, its sixth straight daily increase. The stock has jumped 38 per cent over that period.

Symantec Corp shares weighed on the Nasdaq, tumbling 13 per cent to $18.16 a day after it fired chief executive Steve Bennett, the second time it has sacked its top executive in less than two years.

Despite recent market strength, trading volume has been anemic on positive market days, suggesting limited conviction behind the move. However, volume is expected to surge on Friday as options expire alongside multiple index rebalances. Credit Suisse estimates $14 billion in gross trading from the S&P 500 index rebalance, with another $6 billion from rebalancing in other indexes.

In earnings news, Tiffany & Co reported adjusted fourth-quarter earnings and gave a profit outlook that was below estimates. However, shares rose 1.2 per cent to $92.23.

Lin Media LLC jumped 22 per cent to $26.21. Media General Inc agreed to buy the company for $1.6 billion. Media General jumped 4 per cent to $18.04.

The Federal Reserve said late on Thursday that big US banks have enough capital buffers to withstand a drastic economic downturn. The US central bank said 29 out of 30 major banks met the minimum hurdle in its annual health check.

The only bank to fall under the 5 per cent requirement for top-tier capital was Zion Bancorp, which said it would resubmit a capital plan to the Fed. Shares in Zion fell 3.5 per cent to $31.84.