Stocks rose on Friday on hopes that the U.S. debt ceiling impasse will be resolved, ending a grinding day as investors digested an acceleration in Chinese economic growth, a slide in U.S. consumer sentiment and a gloomy outlook from Intel Corp.
The S&P 500 closed at 1485.98, up 5.04 points or 0.3 per cent – rebounding about 10 points from its earlier low. The blue-chip Dow Jones industrial average closed at 13,649.70, up 53.68 points or 0.4 per cent. In Canada, the S&P/TSX composite index closed at 12,725.69, up 50.96 points or 0.4 per cent.
China reported that its economy grew 7.9 per cent in the fourth quarter, year-over-year, up from 7.4 per cent growth in the third quarter, alleviating concerns that it is headed for a hard landing.
Closer to home, things looked less upbeat. The preliminary reading for the University of Michigan sentiment index fell to a 13-month low of 71.3, down from December and below expectations for a rise in sentiment.
The decline in sentiment followed a budget agreement in Washington that averted the so-called fiscal cliff – yet politicians continue to struggle over the next potential economic pitfall of extending the country’s debt ceiling. On Friday afternoon, House Republicans said they would vote on a plan to extend the debt ceiling enough to give the government a three-month extension in spending.
Intel Corp. fell 6.3 per cent after reporting on Thursday that its sales in the fourth quarter fell 3 per cent. The chip-maker also expressed concerns about sales in the current quarter.
General Electric Co. rose 3.5 per cent after reporting that its operating earnings rose 13 per cent over last year, to $4.7-billion (U.S.) or 44 cents a share, slightly ahead of expectations.
Morgan Stanley surged 7.9 per cent after its earnings rebounded to $505-million or 25 cents a share, also topping expectations.
Research In Motion Ltd. rose 7 per cent after Jefferies analyst Peter Misek upgraded the stock to a “buy” recommendation and raised his price target to $19.50 from $13. The BlackBerry maker is set to unveil its latest smartphone at the end of the month.
Among key commodities, gold fell to $1,687 an ounce, down $3.80. Crude oil rose to $95.56 a barrel, up 7 cents. Suncor Energy Inc. fell 0.7 per cent and Barrick Gold Corp. rose 0.5 per cent.Report Typo/Error