Dow Jones Industrial Average Adds 152 Points
U.S. Stocks Gain on Sharp Oil Recovery, Fed Remarks
The Dow Jones Industrial Average surged 152 points on Friday, helped by a strong recovery in oil prices and Federal Reserve Chairwoman Janet Yellen’s upbeat comments on the U.S. economy.
The Dow Jones Industrial Average jumped to as high as 17,694.51 before trimming gains to 17,668 at 10:51 a.m. in New York. Twenty-two shares were advancing and eight issues were declining. American Express Company (NYSE:AXP), one of the Dow’s worst performing stocks in 2016, was the biggest advancer with a 2.4% gain.
The S&P 500 was up 0.6% at 2,054, whereas the NASDAQ Composite was up 0.4% at 4,868.
Expectations U.S. crude production will continue to decline and optimism about the U.S. economy sent oil prices soaring six percent. On the New York Mercantile Exchange, West Texas Intermediate for May delivery traded at $39.64 a barrel, up 6.5%.
Yellen: U.S. Not in A Bubble
In remarks late Thursday, Yellen sought to dispel worries the U.S., the world’s largest economy, is heading back toward recession and rebuffed the view that suggesting a bubble is ready to burst.
“I certainly wouldn’t describe this as a bubble economy,” Yellen, who has been at the helm of the U.S. central bank since February 2014, said, pointing to a “healing” labor market and a five percent unemployment number.
She said the U.S. economy was on a solid course with some indications of inflation, putting the Fed on track for a gradual hike in interest rates this year.
Yellen showed up on a panel with former Fed Chairs Ben Bernanke, Paul Volcker and Alan Greenspan at the International House in New York.
The 70-year-old economist said she did not regard the December decision of raising interest rates by 0.25% a mistake, as indicators at the time showed “substantial” progress toward the Fed’s labor market and inflation goals.
Moving forward, she pointed out that the Fed would “watch very carefully what is happening in the economy.”
The U.S. dollar’s slight rebound against the Japanese yen on Friday also boosted U.S. stocks. The greenback rose to 108.65 yen after sinking as low as 107.70 in the previous day’s trading, which was the weakest since October 2014.
The gold price for June delivery was up 0.1% at $1,238.60 a troy ounce, while the SPDR Gold Trust was down 0.2% at $118.33.
Boeing Gains; Gap Tumbles
Boeing Co (NYSE:BA) rose 1.7% to $129.13. The plane-making giant said it had booked four orders for its 747-8 freighter, the first sales of the year for the plane.
Yahoo! Inc. (NASDAQ:YHOO) added 2.1% before erasing all gains. Re/code reported that the Internet company had extended the deadline to bid for its businesses by a week.
Gap Inc (NYSE:GPS) slumped 12% to $24.34 after the company’s poor same-store sales for March prompted Citigroup to lower its price target on the stock.
The Dow Jones Industrial Average has recovered from a sharp drop it faced during the first seven weeks of 2016. The measure is currently up 0.6% year-to-date.
