Saturday 1 October 2016

Stock market closes on a high

Published 20/11/2015 | 22:31

Technology firms helped push stocks higher
Technology firms helped push stocks higher

The stock market has closed out its best week of the year as big gains by retailers and technology companies pushed major indexes higher.

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Stocks faded as Friday wore on, but they still finished higher. The S&P 500 index climbed almost 3.3% this week. By just a hair, that was the biggest weekly gain for the index in 2015.

The index climbed Monday and Wednesday as the US market didn't seem to be affected by a string of unsettling international events, including last Friday's terrorist attack in Paris. Instead, investors saw signs the US economy remains strong.

The Dow Jones industrial average rose 91.06 points, or 0.5%, to 17,823.81. The Standard & Poor's 500 index added 7.93 points, or 0.4%, to 2,089.17. The Nasdaq composite index gained 31.28 points, or 0.6%, to 5,104.92. The Dow turned positive for the year by a fraction of a point.

"Throughout the week we got more and more news that the Federal Reserve was assessing the economy favorably," said Erik Davidson, chief investment officer at Wells Fargo Private Bank.

Davidson said investors have slowly gotten used to the idea that the Federal Reserve is going to raise interest rates. That prospect worried them greatly a few months ago, but now, stocks are rising because investors are taking heart that the Fed believes the economy is on solid footing. Meanwhile, new economic stimulus in Europe could strengthen the global economy.

Retailers rallied after solid earnings reports from discount retailer Ross Stores and footwear seller Foot Locker. Retail stocks got pummelled this month after weak reports from Macy's and Nordstrom caused investors to worry that the holiday shopping season would be a damp squib. But some retails are doing well.

Ken Perkins, president of the research firm Retail Metrics, said shoppers are looking for discounts and turning to lower-priced retailers like TJ Maxx and Ross Stores and to "fast fashion" retailers who keep up with the latest trends.

"All that doesn't bode well for mall-based retailers," Perkins said.

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