NEW YORK — US stocks rose on Friday after surprisingly strong manufacturing data overshadowed expectations that the Federal Reserve might reduce stimulus earlier than expected.
Reuters
The Dow Jones industrial average and the S&P 500 rose for the week as well, their fourth straight week of gains.
Factory activity expanded around the world, several business surveys showed, with Chinese manufacturers reporting the fastest upturn in 18 months. The Institute for Supply Management (ISM) said on Friday its index of US factory activity rose to 56,4 in October, its best reading since April 2011.
While the news underscored views that the Federal Reserve may be considering scaling back its stimulus sooner than some market participants have been expecting, it also gave investors surprising evidence of the manufacturing sector’s strength.
The reports “confirmed that maybe the economy isn’t quite as weak or rolling over” as some expected, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, which manages about $58 billion in assets.
The Fed on Wednesday decided to continue its stimulus programme, citing economic weakness.
Boeing Co shares gained 1,9% to $133,03, a day after it said it would increase production of its 737 aircraft to 47 planes per month by 2017 from 38 now — a move that analysts said bodes well for the company.
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The Dow Jones industrial average rose 69,80 points, or 0,45%, to end at 15 615,55. The Standard & Poor’s 500 Index gained 5,10 points, or 0,29%, to finish at 1761,64. The Nasdaq Composite Index added 2.34 points, or 0.06 percent, to close at 3,922.04.
For the week, the Dow rose 0,3% and the S&P 500 gained 0,1%, while the Nasdaq slipped 0,5%.
On the Nasdaq, shares of First Solar Inc jumped 17,6% to $59,14 after the US solar panel manufacturer’s results beat forecasts and the company raised its full-year profit outlook.
Among decliners, shares of Chevron Corp slid 1,6% to $118,01 after third-quarter revenue fell short of expectations.
American International Group Inc dropped 6,5% to $48,28, a day after the insurer reported earnings that slightly beat expectations.
However, analysts expected better results in the insurer’s consumer lines business and said it benefited from a favourable tax rate this most recent quarter.
