NEW YORK — U.S. stocks on Friday advanced to a fourth weekly gain, with both the Dow industrials and the S&P 500 at all-time closes, after data cast a positive spin on the economy.
The Conference Board’s economic index rebounded in April from a downwardly revised reading in March. Separately, the initial May reading of the University of Michigan and Thomson Reuters consumer-sentiment index jumped more than expected, according to news reports.
“Certainly economic data support the market rising, and there is still a huge element related to quantitative easing for sure,” Randy Frederick, managing director of active trading and derivatives at Charles Schwab, said of ongoing monetary easing by the U.S. Federal Reserve.
That easing, which has involved three rounds of bond purchases by the Fed, along with better-than-projected corporate earnings, has fueled a bull run, which entered a fifth year in March.
“We may have been in a bull market even if there was no quantitative easing and interest rates were normalized, but we would have had a far worse recession than we had,” Frederick said.
The S&P 500 is up nearly 17 percent for the year so far.
On Friday, the S&P 500 climbed 11.95 points to 1,667.47, with the index climbing 2.1 percent on the week.
Equities retreated Thursday after a Fed official indicated the central bank might begin tapering back on its asset purchases should the economy continue to improve.
“When the Fed does finally make a statement, I think the market will certainly pull back, and it has room. Geez, we could have a 15 percent correction and only be back at where we started the year,” said Frederick.
Rising 1.6 percent for the week, the Dow Jones industrial average rose 121.18 points on Friday to 15,354.40, with JPMorgan Chase & Co. leading blue-chip gains.
Off the Dow, Northrop Grumman Corp. gained 4 percent after the weapons manufacturer said it would expand its share-buyback program.
The Nasdaq composite advanced 33.73 points to 3,498.97, up 1.8 percent from the week-ago finish.
The U.S. dollar index on Friday rose to a nearly three-year high against currency rivals.
The greenback’s climb helped propel gold towards a seventh down session, with gold for June delivery ending down $22.20 at $1,364.70 an ounce.
“Gold is darn near impossible to predict and is a good example of why bottom-fishing is hard to do. Almost nobody predicted the major meltdown we had in April, and we’re about right back where we were at the bottom of that selloff,” said Frederick.
Longer term, gold works in inverse of the dollar, but those trading the precious metal are largely left with technical factors, as “there are no fundamentals on gold. There are no earnings, no P/E (price-earnings) ratios, no new CEOs to consider,” said Frederick, who added that Schwab advises clients to limit gold to no more than 5 percent of their overall holdings.
Treasurys declined, with the yield on the 10-year note rising to 1.95 percent.
On Thursday, benchmark indexes fell, with the S&P 500 halting a four-session winning run.
“We had a whole pile of soft-patch data this week; the majority of the economic data was either neutral or negative, and the market really didn’t show any weakness until late yesterday, which shows the resilience of this market,” said Frederick.
