The equity benchmark joined the Dow Jones Industrial Average to advance for the year, staging one of the biggest turnarounds in history. The Dow surged 12 percent in 24 days through Thursday, boosted by seven separate daily advances exceeding 1 percent. It’s a stunning comeback from what was the worst-ever start to a year, with stocks pushed over the top as the Fed this week signaled a slower pace of interest-rate increases.
The S&P 500 added 0.4 percent to 2,049 and is now up 0.3 percent this year after falling as much as 11 percent.
“It’s been a good week and a great month for equities as stocks have benefited from the winds of change,” said Terry Sandven, who helps oversee $126 billion as chief equity strategist at U.S. Bank Wealth Management in Minneapolis. “Many of the items that have plagued sentiment and overall equity returns, really since the beginning of the year, seem to be of less of an immediate concern.”
Stocks capped a fifth weekly advance, with the S&P 500 rebounding 12 percent from a Feb. 11 low amid rising crude prices and optimism that monetary policy will continue to support global growth. Friday’s gains were braced by health-care companies, with the group on the way to ending the longest losing streak in two months. Banks were on pace to halt a three-day slide after also lagging a broader rally in the past two weeks.
The Dow average Thursday wiped out a year-to-date decline that swelled to as much as 10 percent in February. It’s the fastest that a retreat of that size or more has ever been reversed this early in a year, data compiled by Bloomberg show. The S&P 500 has climbed 1.3 percent this week, and is less than 4 percent away from a record set last May.
Energy and raw-materials have led the S&P 500 over the last five weeks with gains of more than 16 percent. Energy companies posted the longest streak of weekly advances in 10 months, while raw-materials producers capped the best such stretch since November 2014. A tumble in the dollar Thursday brought on by a more dovish Fed helped push the two groups to three-month highs yesterday.
Rate Bets
The Fed’s tempered outlook for rate increases knocked down traders’ expectations as reflected in futures prices, according to data compiled by Bloomberg. Odds for a June boost to borrowing costs are almost 39 percent, compared with about 54 percent before the Fed’s statement Wednesday.
Probabilities for rate increases had risen in the past month amid better U.S. data, higher crude prices and a rebound in equities. A report today showed consumer confidence eased in the first half of March as lower-income Americans grew more concerned about prospects for the economy and higher gasoline prices.
“A lot of investors who missed out on the rally are feeling the pressure to go back into the market, especially with the index turning positive for the year,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The recovery was pretty stunning and it happened pretty quick. This rally could go on till the end of April.”
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