Stocks headed into the weekend on Friday with solid gains, with markets looking beyond another round of weak U.S. economic news and the uncertainty of Greek elections – and instead focusing on what is expected to be a coordinated central bank policy to the recent economic turmoil.
The Dow Jones industrial average closed at 12,767.17, up 115.26 points or 0.9 per cent. The broader S&P 500 closed at 1342.84, up 13.74 points or 1 per cent. In Canada, the S&P/TSX composite index closed at 11,524.90, up 58.48 points or 0.5 per cent.
Everywhere you looked on Friday, you could see disappointment. U.S. industrial production in May fell 0.1 per cent, versus expectations for a gain of 0.1 per cent. Manufacturing output in May fell 0.4 per cent. The Empire manufacturing survey fell to 2.3 in June, down from 17.1 in May. And the University of Michigan's consumer sentiment index fell to 74.1, hitting its lowest level since December.
The situation in Canada looked just as grim, with Canadian manufacturing sales slipping 0.8 per cent in April, versus expectations for a gain of 0.4 per cent.
But investors have grown accustomed to the onslaught of bad news. Indeed, they seem to be accepting the onslaught as a sign that central banks are going to have to step into the fray with another round of stimulus. The head of the European Central Bank said on Friday that the ECB stands ready to lend money to the region's banks should a cash crunch occur, a comment that was seen has particularly weighty given the timing before Greek elections.
On Wednesday, the Federal Reserve will conclude a two-day monetary policy meeting, releasing its latest statement on economic conditions, with some observers expecting some sort of stimulus reponse.
Among the big movers in the United States, Bank of America Corp. rose 3.1 per cent, Chevron Corp. rose 2.4 per cent and Microsoft Corp. rose 2.3 per cent.
In Canada, Barrick Gold Corp. rose 1.1 per cent, Suncor Energy Inc. rose 1.7 per cent and Royal Bank of Canada rose 0.8 per cent.