U.S. stocks reversed course and climbed steadily Friday after the release of a government report showing that
The Dow Jones industrial average gained 0.75%, while the broader Standard & Poor's 500 index and the Nasdaq composite index took bigger jumps, of 0.8% and 1%, respectively. The Dow settled at 12,554, gaining 93 points for the day.
Investors were relieved and pleased with the report that suggests second-quarter growth could be better than the 1.9% gain at an annual rate in the first quarter.
Investors initially were selling stock on continuing concerns about signs of slowing growth in the U.S. and China.
Shares of Facebook ( FB) closed 79 cents higher, or 3%, to $27.10. The stock is still down 29% since its initial public offering price of $38, and was down for the week.
The stock price boost comes a day after Facebook started rolling out its App Center to users. It's a place where people can find Facebook apps recommended to them based on their interests or apps that their friends like.
Investors also listened closely to President Obama's remarks on the economy at a press briefing at the White House Friday.
European markets, meanwhile, stemmed earlier losses but failed to finish the day in positive territory. Britain's FTSE 100 closed down 0.23% to 5,435. Germany's DAX lost 0.22% to 6,130 and France's CAC-40 fell 0.63% to 3,051.
Those losses came a day after Federal Reserve Chairman Ben Bernanke indicated there were no immediate plans to boost growth in the world's largest economy, wiping out gains made on China's surprise interest rate cut.
The Dow has risen for the past three days. But investors have their eyes on new monthly trade and industrial data due out this weekend in China, which could come in even weaker than analysts are forecasting.
The Chinese government cut interest rates for the first time in four years and has also reduced gasoline and diesel prices. Those are signs that its leaders feel more urgency ahead of the reports.
In an appearance before members of Congress, Bernanke avoided giving any signals about what the Fed might do in response to a slowdown in hiring. The 69,000 jobs created in May were the fewest in a year.
Francis Lun, managing director of Lyncean Holdings in Hong Kong, said markets were "slightly disappointed" that Bernanke had not said the Fed would extend its Treasury bond-buying program, known as quantitative easing. The program injects money into the financial system, lowering interest rates to spur lending and growth.
"The economy is slowing much faster than people expected," he said.
China has rolled out a series of measures to stimulate the economy after growth fell to a nearly three-year low of 8.1 % in the first quarter and April factory output grew at its slowest rate since the 2008 crisis. Private sector analysts expect this quarter's growth to fall further.
Investor concerns remained focused on Europe, where a lingering financial crisis has infected Spain and its banks.
Expectations are rising that Spain's leaders will have to seek an international bailout for banks, which credit agency Fitch estimates could reach 100 billion ($126 billion). Amid reports that Spain could ask for financial aid this weekend, the government on Friday said it would wait for results from independent reports on the financing needs of its banks. Those reports are due by June 21 at the latest.
Mainland Chinese shares lost ground, with the benchmark Shanghai Composite Index falling for a fifth straight trading day, shedding 0.5%, or 11.68 points, to 2,281.45, the lowest closing in more than two months.
Elsewhere in Asia, Japan's Nikkei 225 index fell 2.1% to close at 8,459.26. South Korea's Kospi dropped 0.7% to 1,835.64.
Benchmark oil for July delivery was down $2.59 to $82.24 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $84.82 per barrel in New York.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Ahead of the Bell: Wholesale Inventories - Yahoo Finance
WASHINGTON (AP) -- Businesses likely slowed their restocking of store shelves this year following a big jump in inventory building at the end of last year.
The Commerce Department will report on inventories for April on Friday at 10 a.m. Eastern time. Many economists were looking for another modest gain with analysts forecasting that sales at the wholesale level rose 0.4 percent, according to a survey by FactSet.
Businesses order more goods when they increase their stockpiles. That typically leads to more factory production and economic growth.
It would have taken roughly five weeks to exhaust all wholesale stockpiles at the March sales pace. That's considered a healthy time frame and suggests businesses will keep restocking to meet demand.
Inventories are expected to keep growing this year, though probably nowhere near the level seen at the end of last year.
Many businesses cut back on restocking last summer fearing that the economy was on the verge of another recession. When it became clear that it wasn't, they raced to rebuild stockpiles and keep pace with consumer demand.
In the first three months of this year, the economy grew at an annual rate of 1.9 percent. That gain was driven by the fastest growth in consumer spending since late 2010.
Consumers spent more partly in response to strong hiring. But hiring has slowed sharply over the past two months. In May, employers add just 69,000 jobs, the smallest increase in a year, and the unemployment rate edged up form 8.1 percent in April to 8.2 percent in March.
And wages have continued to lag as well. Sluggish job growth and weak pay raises threaten to drag on consumer spending. That would weaken growth. Consumer spending accounts for 70 percent of economic activity.
Stockpiles at the wholesale level account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total. Manufacturing inventories represent about 40 percent of the total.
Eric Pickles tells 'tatty' shopping parades how to succeed - BBC News
Communities Secretary Eric Pickles has issued a set of guidelines to help "tatty" shopping parades in England compete with the High Street.
He urges small neighbourhood shops to "kick out the louts", set up "savvy" services and "restore local pride".
Labour branded his "shopping list for success" - which comes with no new money - "patronising" but it was welcomed by a leading trade body.
Retail guru Mary Portas has drawn up a £10m plan to revive the High Street.
But the Department for Communities and Local Government says it wants to reassure local convenience stores which employ 10 people or fewer that they have not been forgotten, describing them as "crucial" to the economy.
Local grocery shops, newsagents and cafes have been squeezed by the growth of out-of-town shopping centres and online retail, although are still growing at a faster rate than High Street stores, according to research quoted by the DCLG in a report.
'No-go zones'Mr Pickles said: "In the past too many neighbourhood shopping parades have been left to fade in memory and outlook.
“Start Quote
End Quote National Association of Convenience StoresThe government is giving long overdue credit to local shops and helping them by giving practical advice on how to work together and thrive”
"Convinced they can't compete with the mega stores and besieged by gangs of louts they have become tatty, no-go zones turning our beloved local convenience store into the local inconvenience.
"We've taken action to back local firms and small shops and today we are offering up ways to rescue run down shop parades by kicking out the louts, set up savvy services for shoppers and restoring the local pride in parades."
He said parades should be "thriving beacons of local business, home to the character of the neighbourhood community and the local shoppers' destination of choice".
The guide sets out government support available to local shops, such as the "Community right to bid", which is meant to make it easier for local people to take over "treasured" local assets faced with closure.
'Unhelpful'But Shadow Communities and Local Government minister Roberta Blackman-Woods, for Labour, said: "This is further gesture politics from the government to cover up their lack of an economic plan for the country and for High Streets.
"While shop owners are working hard to keep their businesses going, the government has done little to improve consumer confidence and get our economy moving again.
"Advice like 'Go the extra mile on service' is simply patronising and unhelpful."
But Mr Pickles' guidance was welcomed by the Association of Convenience Stores, which helped draw it up.
Chief Executive James Lowman said: "The government is giving long overdue credit to local shops and helping them by giving practical advice on how to work together and thrive."
He said Mr Pickles' department had made "great strides in its new National planning Policy Framework that will make it harder for big out-of-town stores to open up and destroy the diversity of local parades."
No comments:
Post a Comment