New York: US stocks rose last week, with the Standard & Poor's 500 Index completing its best February since 1998, as data on housing and the jobs market improved and monthly sales from Gap to Ford Motor beat estimates.
Equities trimmed their advance Friday after the S&P 500 climbed to the highest since 2008 and the Dow Jones Industrial Average closed above 13,000 for the first time in nearly four years last week. Consumer and financial stocks rose the most among ten S&P 500 industries last week, each rising 1.4 per cent as a group.
JPMorgan Chase added 6.1 per cent as an analyst said it would be worth more if broken up. Alpha Natural Resources fell 15 per cent, leading a drop in energy shares.
The S&P 500 added 0.3 per cent to 1,369.63, a third straight weekly gain. The benchmark measure rallied 4.1 per cent last month, and has risen for eight out of nine weeks this year. The Dow Jones Industrial Average fell 5.38 points, or less than 0.1 per cent, to 12,977.57, its first retreat in three weeks. The gauge closed at 13,005.12 on February 28.
"We didn't think the market would jump as much as it did the first six weeks, but given the positive econ-omic numbers, it raced on up," Thomas Nyheim, a Greenville, Delaware-based fund manager for Christiana Trust, which oversees $9.6 billion (Dh35.25 billion), said in a telephone interview. "The market raced up to our target on the S&P. So you might sort of flatline for months and months."
Consumer confidence
Stocks advanced as more Americans than forecast signed contracts to buy previously owned homes, jobless claims declined to a four-year low and the Conference Board's index of consumer confidence rose to the highest level in a year.
The S&P 500 fell 0.3 per cent Friday amid concern that the rally that drove the benchmark gauge to the highest level since 2008 has outpaced global growth prospects.
"We suspect that any pullback or pause here should be one that refreshes," Louise Yamada, managing director of Louise Yamada Technical Research Advisers in New York, said in a Bloomberg TV interview.
The S&P 500 has risen 25 per cent from its 2011 low in October amid better-than-estimated earnings and economic data. The measure trades at about 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.
The index has the potential to reach a record high of 1,700 this year should economic growth surprise investors the same way falling bond rates did in 1995, Birinyi Associates said.
An expansion that exceeded forecasts in the world's largest economy would help stocks rally after economists tempered their estimate for growth in 2012 to 2.2 per cent from 2.3 per cent earlier in the year, according to Laszlo Birinyi, who was among the first to suggest buying stocks in March 2009.
Potential for surprise
The potential for surprise is similar to 1995, when the yield on the 30-year US Treasuries fell 1.93 per centage points, even as Wall Street predicted it would gain, according to a report from the Westport, Connecticut-based firm.
The S&P 500 Consumer Discretionary Index climbed 1.4 per cent last week, closing near its highest level in Bloomberg data going back to 1989.
Car companies as an S&P group advanced 2.4 per cent, after US auto sales accelerated at the fastest pace in four years. Ford's deliveries jumped 14 per cent to 178,644 last month, exceeding the average 9.4 increase estimated by analysts in a Bloomberg survey. Ford climbed 4 per cent to $12.72. GM, which reported a surprise sales gain, added 1.5 per cent to $26.45.