Longest rally since May 2007
Corporate earnings inspire optimism, as does Europe’s efforts to control the debt crisis.
U.S. stocks rose for a seventh consecutive week, the longest rally since May 2007, buoyed by optimism about corporate earnings and European efforts to control the region’s debt crisis.
J.P. Morgan Chase jumped 2.9 percent as the lender posted record quarterly profit. Financial shares in the Standard & Poor’s 500-stock index climbed 3.2 percent after Wells Fargo raised its rating for large banks on prospects for higher dividends. Higher oil prices boosted energy shares, which climbed the most among S&P 500 groups. Micron Technology, Nvidia and Novellus Systems surged at least 12 percent amid optimism about semiconductor demand.
The S&P 500 rose 1.7 percent to 1293.24 last week, the biggest gain in five weeks and its highest level since Aug. 28, 2008. The Dow Jones industrial average added 112.62 points, or 1 percent, to 11,787.38.
“We have an environment that’s supportive for stocks,” said Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles in Boston, which manages $150 billion. “We’re not going into a double-dip.”
The S&P 500 rallied amid European actions to bolster the region’s sovereign-bailout fund and Portugal’s successful sale of government debt. A positive start to the U.S. earnings season overshadowed economic data showing initial jobless claims rose.
The Treasury will auction $29 billion of three-month bills and $28 billion of six-month bills on Tuesday. They yielded 0.152 percent and 0.183 percent, respectively, in when-issued trading. The U.S. government will sell onemonth bills the next day and $13 billion in 10-year Treasury Inflation-Protected Securities on Thursday.