Stocks break out of weeklong slump

“We’re probably at the peak of growth right now...”

Barbara Reinhard, head of asset allocation at Voya Investment

U.S. stocks closed higher for the first time all week as traders digested positive factory output and consumer sentiment reports before next week’s Federal Reserve meeting. Ten-year Treasury yields rose and the dollar gained.

The S&P 500 broke out of longest slump of the year Friday, led by energy stocks as Texas crude spiked above $62 a barrel. The benchmark fluctuated late in the session thanks in part to “quadruple witching,” when futures and options contracts on indexes and individual stocks expire.

The last batches of economic data released before the Fed meeting were mixed. U.S. factory production bounced back in February, exceeding estimates, according to Federal Reserve data, and consumer sentiment jumped to its highest since 2004. But unexpectedly weak February retail sales pushed down forecasts for the annualized pace of expansion in the first quarter.

“We’re probably at the peak of growth right now, over to a gentle rollover. I wouldn’t say it’s going to be a growth scare where the markets are going to say, ‘Holy smokes! We’re going to sell off 10 percent in equities because the Fed’s overtightened,”’ Barbara Reinhard, head of asset allocation for multi-asset strategies at Voya Investment Management, said by phone. “But what this probably does is, it probably takes some of the interest rate tightening concerns and fears, which got so overblown in January, out of the markets, and that’s a good thing.”

European equities gained after Asian shares slipped. The euro pared an advance after the region’s inflation figures were revised downward. The yen gained, gold fell.