U.S. stocks shook off a bad start on Friday, ending the day higher and giving the benchmark U.S. index its best weekly gain in 2012 – even as sliding energy stocks drove Canada’s benchmark index lower.
The Dow Jones industrial average closed at 12,554.20, up 93.24 points, or 0.8 per cent. The broader S&P 500 closed at 1325.66, up 10.67 points, or 0.8 per cent. In Canada, the S&P/TSX composite index closed at 11,500.63, down 91.49 points, or 0.8 per cent.
For the week, the S&P 500 rose nearly 3.8 per cent, a sharp turnaround from last week’s 3 per cent decline and marking its best weekly performance since December 2011.
Stocks had slumped at the start of the day, continuing to reflect disappointment with Federal Reserve chairman Ben Bernanke. On Thursday, he failed to disclose any clear signals that the central bank was preparing a stimulus response to weak economic conditions, dashing some expectations among investors.
At the same time, economic news in Europe remained far from encouraging. In the latest, Germany's exports slumped 1.7 per cent in April, a far bigger dip than economists had been expecting. Meanwhile, Spain is expected to seek financial help from the euro zone this weekend in dealing with its ailing banking sector.
Most of Europe’s major indexes finished the day lower, with Germany’s DAX index and the U.K.’s FTSE 100 falling 0.2 per cent each. Spanish government bonds fell, sending the yield on the 10-year bond to 6.17 per cent, up 13 basis points (there are 100 basis points in a percentage point). The yield on Italy’s 10-year bond rose to 5.75 per cent, up 6 basis points.
Despite the grim backdrop, investors appeared buoyed by hopes that a European response to Spain’s banking crisis will yield results.
Among some of the key moves in the U.S. market, Wal-Mart Stores Inc. rose 3.6 per cent and JPMorgan Chase & Co. rose 2.7 per cent. McDonald's Corp. fell 0.7 per cent after it reported that global sales rose 3.3 per cent in May, missing expectations. It also warned that European austerity measures would likely hurt results.
In Canada, energy stocks were among the biggest laggards after the price of crude oil gyrated, ending the day at $84.10 (U.S.) a barrel, down 72. Suncor Energy Inc. fell 1 per cent.