Stocks Rise on Speculation of Fed Support
NEW YORK (TheStreet) -- U.S. stock indices rose Friday, erasing earlier losses, as investors thought it was increasingly likely the Federal Reserve will prop up the economy.
The Dow Jones Industrial Average climbed 41 points, or 0.3%, to 13,206 after trading as low as 13,095. The index closed up 0.9% for the week.
Of the 30 components on the blue-chip index, 10 were in the red. Cisco Systems(CSCO) , American Express(AXP) and Walt Disney(DIS) were the biggest percentage losers. McDonald's(MCD) , Hewlett-Packard(HPQ) , United Technologies(UTX) and DuPont(DD) were among winners.
The S&P 500 rose 3 points to 1,406. It closed up 1.1% for the week.
The Nasdaq finished up 2 points to 3,021, climbing 1.8% for the week.
Volume totaled a thin 59.9 million on the Dow and 1.55 billion on the Nasdaq.
Doug Roberts, chief investment strategist for Channel Capital Research, noted that this week, global jitters kept the S&P 500 locked in a trading range of 1,280 on the downside and 1,420 on the upside.
"Now you have a situation where the Fed says it will have our back -- that 'we will resolve this, but don't have details' -- that makes people nervous," said Roberts.
Data from China's General Administration of Customs showed the country's exports grew a mere 1% in July from a year earlier, falling significantly short of forecasts for an 8.6% increase, according to a Reuters poll. Imports grew just 4.7%, far below expectations of a 7.2% rise.
On Thursday, data showed that growth of industrial production in China fell to 9.2% in July from 9.5% in June, its lowest rate since May 2009.
"Clearly, the sluggish export sector was another factor behind the weaker-than-expected industrial production data yesterday," said Yao Wei, a China economist at Societe Generale. "We think July probably was not the bottom."
Wei said Beijing may make one more attempt to lift market confidence, most likely with an imminent 50-basis-point cut in the reserve ratio requirement.