U.S. stocks advance, sending the Standard & Poor’s 500 Index reaching to its biggest weekly gain since Octoberas data, showing faster-than-estimated GDP growth boosted confidence in the world’s largest economy.
The S&P 500 added 0.5% to a record 1,818.32 at 4 p.m. in New York. The Dow Jones Industrial Average rose 42.06 points, or 0.3%, to 16,221.14, also an all-time high.
Despite all the records the Dow has set since 2007, it was only Friday that the index returned to its January 2000 record in inflation-adjusted terms, using the consumer-price index to measure inflation.
By itself, this event doesnt predict a lot about how long stocks will keep rising, Prof. Hausman. “The one thing that is certain is that stocks will go up and down,” he said.
It also doesnt mean that everything is back to normal. Unemployment remains painfully high, and both wage growth and economic growth are weak. The Federal Reserve will continue to stimulate the economy with $75 billion in monthly bond purchases, although it said this past week that it hopes to be able to gradually withdraw that stimulus now.
Data yesterday showed the rate of expansion in the third quarter was faster than previously estimated as consumers stepped up spending on services such as health care and companies invested more in software. Gross domestic product climbed at a 4.1% annualized rate, the strongest since the final three months of 2011 and up from a previous estimate of 3.6%, Commerce Department figures showed.
In corporate news, BlackBerry Ltd. surged 16%, the most since April 2009, to $7.22. The struggling smartphone maker struck a five-year deal with Foxconn Group to manufacture its devices, following another quarterly plunge in sales and mounting losses. The deal lets BlackBerry offload more of the costs of its unprofitable manufacturing operations, helping it focus on corporate software and services.
Allergan Inc. advanced 3.8% to $107.73. The maker of the Botox wrinkle treatment may be issued a patent for its Restasis eye drops as soon as January, Ken Cacciatore, an analyst with Cowen & Co., said in a note, citing legal consultants.