Reports give stocks a boost
The rally continues a strong September. Economic news has been surprisingly good.
NEW YORK - Stocks rose sharply Friday, giving the market its fourth straight week of gains, after a big increase in orders for manufactured goods allowed investors to shake off several days of doldrums.
The Dow Jones industrial average jumped nearly 200 points, its first gain in three days.
A surprise jump in durable-goods orders and corporate spending provided the boost to U.S. stocks, as did a strong earnings report from Nike Inc.
Gold prices climbed to another record, briefly touching $1,300 an ounce, as many investors remained cautious. The dollar and Treasury prices fell.
Industrial stocks including General Electric Co., Caterpillar Inc., and United Technologies Corp. gained after the Commerce Department reported that orders for durable goods excluding transportation rose last month at their fastest pace in five months, while corporate spending also rose.
Stocks have been volatile in recent days as investors react to the latest economic reports. Much of the economic news throughout September has been better than expected, pushing indexes sharply higher after a big sell-off in August.
The Dow Jones industrial average rose 197.84, or 1.9 percent, to close at 10,860.26.
The Dow has risen 8.4 percent in September, but is up only 4.1 percent for the year and is still 3.1 percent below its 2010 high reached April 26.
The Dow is on track for its best performance for September, which is usually a weak month for stocks, since 1939.
The Standard & Poor's 500 index rose 23.84, or 2.1 percent, to 1,148.67, ending a three-day losing streak. The index, a commonly used benchmark for professional investors, also climbed back above a key technical trading level Friday.
The Nasdaq composite index rose 54.14, or 2.3 percent, to 2,381.22. The technology-focused index has been the best performer during this month's rally, jumping 12.6 percent.
For the week, the Dow is up 2.4 percent, the S&P 2.1 percent, and the Nasdaq 2.8 percent.
One simple explanation for this month's surge is that many people were keeping money in cash at the start of September and did not want to miss out on the rally once it got going, said Cleve Rueckert, an equity strategist at Birinyi Associates, a money-management and research firm.
"You're in cash and want to buy stocks, and you're looking at a market that isn't going down," he said. "You start chasing it."
Nike rose $1.90 or 2.5 percent, to $79.57. GE rose 52 cents, or 3.2 percent, to $16.66, while Caterpillar jumped $3.47, or 4.6 percent, to $79.73. United Technologies shares rose $1.70, or 2.4 percent, to $71.50.
Bond prices fell after the durable-goods orders report.