Stocks rose on Friday, breaking out of a recent slump that had hammered major indexes in recent days and sent the benchmark U.S. index toward four-month lows.
The S&P 500 closed at 1,359.88, up 6.55 points, or 0.5 per cent. The Dow Jones industrial average closed at 12,588.31, up 45.93 points, or 0.4 per cent – after recovering more than 110 points from its earlier low. In Canada, the S&P/TSX composite index closed at 11,877.72, up 66.34 points, or 0.6 per cent.
The recent market setbacks had driven the S&P 500 down as much as 8 per cent from its recent high in September, as investors fret over the looming U.S. fiscal cliff of automatic tax increases and spending cuts, and a weak global economy.
On Friday, there was at least one encouraging sign on the fiscal cliff after House Speaker John Boehner said that he had had “constructive” talks about the U.S. budget with President Barack Obama. The news reversed market losses near the start of trading.
However, the economic backdrop didn’t improve. A report showed that U.S. industrial production fell 0.4 per cent in October, well below expectations for a gain of 0.2 per cent – although the impact of Hurricane Sandy, which hit the east coast last month, may be largely to blame.
Alcoa Inc. rose 1.6 per cent, Home Depot Inc. rose 1.4 per cent and American Express Co. rose 1.2 per cent, marking the biggest gains within the Dow.
Technology stocks, which had been driving the recent market weakness, showed mixed results. Dell Inc. fell 7.3 per cent after reporting on Thursday that earnings fell to $475-million (U.S.), or 27 cents a share, down from 49 cents a share last year.
However, Apple Inc. ended the day 0.4 per cent higher, ending a steep slide that had sent the share price down about 27 per cent from its record high in September.
Among commodities, gold rose to $1,714.70 an ounce, up 90 cents. Crude oil rose to $86.62 a barrel, up $1.17.
Among Canadian commodity producers, Suncor Energy Inc. fell 0.4 per cent, Canadian Oil Sands Ltd. rose 2 per cent and Barrick Gold Corp. rose 1.5 per cent.
BCE Inc. rose 1.5 per cent after Astral Media Inc. said that it was in discussions with the telecom giant to amend a takeover agreement recently rejected by the Canadian regulator. Astral trading was halted early in the day, but ended the day up 5.1 per cent.