Stocks Edge Higher, Continue September Rally
Stocks inched higher Friday as investors held on to their newfound optimism about the economy.
The Dow Jones industrial average rose 14 points in very light trading, but pared its earlier gains. Broader indexes also rose, and Treasury prices eased as traders became more willing to take on risk. If stocks end the day higher, it would be the seventh day of gains out of the past eight.
While the economy is still struggling, a series of reports in recent weeks have come in ahead of estimates and eased fears that the U.S. would fall back into recession.
"It's becoming more evident that confidence by consumers and the labor market is improving," said Tim Speiss, chairman of EisnerAmper's Personal Wealth Advisors practice. "It's tepid; It's weak; But it's progress."
The market got another dose of positive news on the economy Friday when the Commerce Department reported that wholesale inventories and sales increased sharply in July, well ahead of expectations. It's a bullish sign when wholesalers build up inventories because it indicates they expect retail sales will pick up.
"There's been so much negativity that it doesn't take much in terms of data beating expectations to propel the market," said Hank Smith, chief investment officer at Haverford Investments.
The market's September rally has paused only once so far, when concerns resurfaced about European banks. European markets fluctuated Friday after a report that German banking giant Deutsche Bank is considering raising new cash through a stock sale. The report came out Thursday afternoon, so U.S. markets already had a chance to react to the news.
The Dow rose 14.00, or 0.1 percent, to 10,429.47 in midday trading. The Dow has jumped more than 4 percent already this month, but is nearly flat for the year and still down 7 percent from its highest level of the year reached April 26.
The Standard & Poor's 500 index rose 2.13, or 0.2 percent, to 1,106.31, while the Nasdaq composite index fell 3.10, or 0.1 percent, to 2,233.10.
About two stocks rose for every one that fell on the New York Stock Exchange, where volume was extremely low at 266.9 million shares. Volume will likely remain light Friday because of the Jewish holiday, Rosh Hashanah. Low volume can exaggerate market movements.
Britain's FTSE 100 rose 0.1 percent, Germany's DAX fell 0.1 percent, and France's CAC-40 rose 0.1 percent.
Bond prices dipped. The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.80 percent from 2.76 percent late Thursday. Its yield is used to help set interest rates on mortgages and other consumer loans.
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