Gold shines to push stocks higher
NEW YORK (AP) - Stocks rose for a fourth straight day yesterday, led by shares of minerals companies after gold prices settled at another record high.
The Dow Jones industrial average rose 16 points and ended the week up 2.3 percent. Broader indexes also edged higher.
Gold settled at a record for a second consecutive day. That lifted shares of mining companies like Barrick Gold Corp. and Newmont Mining Corp.
Corporate news also brought out buyers. CVS Caremark Corp. and Walgreen Co. ended a contract dispute that threatened to hurt profits. CVS shares rose 1.9 percent, while Walgreen climbed 2.8 percent. Dow component Caterpillar Inc. gained 1.4 percent after reporting sharply higher sales.
The Dow posted its second consecutive weekly gain. Before that, the Dow had been down for three weeks. Investors have been trying to determine whether the stock market's "correction" is over. A correction is generally considered a drop of 10-20 percent from a recent peak. The Dow has risen back 6.4 percent from its lowest close of the year on June 7, but it's still down 6.7 percent from the 2010 high it reached on April 26.
"I don't know that we're totally through the correction," said Stu Schweitzer, global markets strategist at JPMorgan's Private Bank in New York. "I do expect markets to remain quite volatile all through the rest of this year but I still expect that we're going to end the year higher."
According to preliminary calculations, the Dow rose 16.47, or 0.2 percent, to close at 10,450.64. The broader Standard & Poor's 500 index rose 1.47, or 0.1 percent, to 1,117.51. The Nasdaq composite index edged up 2.64, or 0.1 percent, to 2,309.8.
All three indicators posted solid gains for the week. The Dow is up 2.3 percent, the S&P 500 2.4 percent and the Nasdaq three percent.
Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 1.8 billion shares versus 1.2 billion the day before. Volume was heavier because of the simultaneous expiration of four kinds of futures and options contracts, which occurs once every quarter.
Trading was relatively quiet considering the options and futures expirations, which can often bring volatility as traders adjust their portfolios. The week that follows the June expiration is often a losing one for investors. The Dow has posted a loss during that week for the past 11 years, according to the Stock Trader's Almanac.
Bond prices slipped, pushing interest rates higher. The yield on the benchmark 10-year Treasury note rose to 3.23 percent from 3.20 percent late on Thursday.
The dollar was mixed against other major currencies, while the euro fell to $1.2383.
Crude oil rose 39 cents to settle at $77.18 per barrel on the New York Mercantile Exchange.
Randy Frederick, director of trading and derivatives at Charles Schwab, said the market's bounce from its recent lows has come too quickly. He said professional traders are building up positions in investments that would cushion their losses if the market fell again.
"Not that we're going into this big ugly bear market but to go back down to the lows that we were at just a few weeks ago, I think, seems very possible based on what I see," Mr. Frederick said. "I see a reason to be a little cautious right now."
The coming week brings readings on home sales and consumer sentiment. The Federal Reserve also will meet on interest rates.
Gold settled up $1,258.30 an ounce, a gain of $9.60. Barrick Gold rose $1.56, or 3.5 percent, to $46.38, and Newmont Mining climbed $1.57, or 2.6 percent, to $61.25.
CVS rose 59 cents to $32.43, while Walgreen gained 82 cents to $30.09. Caterpillar gained 90 cents to close at $65.85.
The Russell 2000 index of smaller companies rose 1.07, or 0.2 percent, to 666.92.
Britain's FTSE 100 and Germany's DAX index each slipped about 0.1 percent, while France's CAC-40 rose 0.1 percent. Japan's Nikkei stock average was essentially flat.