En­cour­aged In­vestors Pro­pel Mar­ket

The Washington Post Sunday - - Market Watch -

Stocks

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

Bonds

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

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