Encouraged Investors Propel Market
Stocks rose sharply last week, completing the market’s recovery from a global sell-off in February, as strong corporate earnings reports and government data indicating core inflation was in check encouraged investors.
The Dow Jones industrial average gained 349.85, or 2.77 percent, to end the week at 12,961.98, a new record. The Standard & Poor’s 500-stock index rose 31.50, or 2.17 percent, to 1484.35, its highest close for the year. The Nasdaq composite index rose 34.95, or 1.38 percent, to 2526.39.
Wall Street was pleased with profit reports from several big companies — including Caterpillar, Honeywell and American Express — that exceeded analysts’ expectations. Meanwhile, a Labor Department report showed that after excluding volatile energy and food costs, inflation rose less than expected in March, easing investors’ concerns about the economy.
Shares of Yahoo fell more than 12 percent as the Internet company’s quarterly results fell short of estimates. Sallie Mae shares soared 15 percent, after the Reston student loan company said it had accepted a $25 billion buyout offer.
— Mike Shepard
Treasury yields fell across the curve last week after the government reported that inflation, outside of energy prices, declined in March. The Labor Department’s core consumer price index, which excludes volatile food and energy prices, rose just 0.1 percent last month, the smallest increase in three months. Bond prices rallied as investors shrugged off a big 0.6 percent jump in overall inflation caused primarily by a steep run-up in gasoline prices.
The inflation figures, plus others showing mild economic growth, strengthened expectations the Federal Reserve will hold interest rates steady at its next meeting in May.
Tomorrow, Treasury will sell $13 billion in three-month bills and $12 billion in six-month bills, which yielded 4.97 percent and 5.03 percent, respectively, in when-issued trading Friday. Also tomorrow, Treasury will announce details of an auction of four-week bills to be held Tuesday, an auction of two-year notes to be held Wednesday and a sale of five-year notes Thursday. On Tuesday, there will be a sale of $8 billion in inflation-indexed five-year notes.
— Nell Henderson