U.S. stocks extend records on Fed bets amid factory reports
BENCHMARK EQUITY GAUGES in the United States finished off a sixth consecutive week of gains on Friday, with the Dow Jones Industrial Average finishing the day less than 100 points from the 16,000 mark, as trading on the New York Stock Exchange remained within its average volume for the last three months.
NEW YORK - U.S. stocks rose to records, with benchmark gauges capping a sixth week of gains, as investors assessed data on factory output amid growing speculation the Federal Reserve will maintain the pace of its monthly stimulus.
Exxon Mobil Corp. rallied 2.2 percent to a record after Warren Buffett’s Berkshire Hathaway Inc. disclosed a stake. FedEx Corp. climbed 1.6 percent as billionaire investors George Soros and John Paulson took positions. Fannie Mae and Freddie Mac increased at least 6.2 percent as Bill Ackman’s hedge fund bought shares in the government-backed mortgage insurers. Western Union Co. dropped 4.3 percent after the company said its chief financial officer is leaving.
The Standard & Poor’s 500 Index rose 0.4 percent to 1,798.18 at 4 p.m. in New York. The gauge gained 1.6 percent in the past five days, capping its longest streak of weekly gains since February. The Dow Jones Industrial Average added 85.48 points, or 0.5 percent, to 15,961.70, a third consecutive record. About 6.1 billion shares changed hands on U.S. exchanges Friday, in line with the three-month average.
Janet Yellen’s remarks yesterday told investors that “interest rates are going to remain low for a while, which is a positive environment for equities,” John Fox, director of research at Fenimore Asset Management in Cobleskill, N.Y., said by phone. Fenimore oversees about $1.8 billion. “The combination of earnings growth and expanded PE due to investors feeling better about things just continues to move the market higher.”
The S&P 500 and the Dow rallied as Yellen, nominated to succeed Ben S. Bernanke as chairman of the Federal Reserve, said yesterday the central bank should take care not to withdraw stimulus too early from an economy that is operating well below potential.
Data Friday showed manufacturing in the New York region unexpectedly contracted in November. A separate report showed total industrial production in the U.S. fell 0.1 percent in October as output at mines and utilities declined. Factory output rose more than forecast. Wholesale inventories widened by 0.4 percent in September, the Census Bureau said.