Wall Street puts
finishing touch on best week since March
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[May 28, 2016]
By Noel Randewich
(Reuters) - Wall Street rose on Friday and
capped off its strongest week since March after U.S. Federal Reserve
Chair Janet Yellen said an interest-rate hike would likely be
appropriate "in the coming months."
Yellen's is the most important voice in a chorus of policymakers
recently suggesting that the U.S. economy has improved enough to
warrant tighter borrowing costs, with a growing number of investors
now expecting a hike in June or July.
While higher interest rates choke liquidity in stock markets, many
investors see a potential rate hike as a vote of confidence that the
struggling U.S. economy is finding its legs.
"As we look at our place in the global economy, things just seem to
be improving to a point where it certainly looks likely that June or
July will be the next launching point," said Paul Springmeyer,
portfolio manager at the Private Client Reserve of U.S. Bank.
"With the increased strength, we should get up off of those
historically low levels where we are."
After Yellen's speech, traders raised their expectations of a June
rate hike to 34 percent from 30 percent, according to CME Group.
The Fed next meets on June 14-15.
Data on Friday showed U.S. economic growth slowed in the first
quarter, although not as sharply as initially thought.
All of the 10 major S&P sectors rose, with the telecom <.SPLRCL> and
financial <.SPSY> indexes leading the gainers.
The Dow Jones industrial average <.DJI> climbed 0.25 percent to end
at 17,873.22 points and the S&P 500 <.SPX> gained 0.43 percent to
2,099.06.
The Nasdaq Composite <.IXIC> added 0.65 percent to 4,933.51.
For the week, the S&P 500 rose 2.3 percent and the Dow added 2.1
percent, the best weekly performance for both since March. The
Nasdaq gained 3.4 percent for the week, its best weekly result since
February.
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Traders work on the floor of the New York Stock Exchange (NYSE) in
New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid
For 2016, the S&P 500 is up 2.7 percent.
Friday's volume was muted as investors checked out ahead of a long weekend, with
U.S. stock markets closed on Monday for the Memorial Day holiday.
Just 5.6 billion shares changed hands on U.S. exchanges, well below the 7.1
billion daily average for the past 20 trading days, according to Thomson Reuters
data.
Cyber security firm Palo Alto <PANW.N> dropped 12.36 percent after a
wider-than-expected quarterly loss.
GameStop <GME.N> fell 3.93 percent after the video-game retailer forecast
lower-than-expected revenue and profit for the current quarter.
Advancing issues outnumbered decliners on the NYSE by 2,034 to 974. On the
Nasdaq, 1,905 issues rose and 896 fell.
The S&P 500 index showed 22 new 52-week highs and no new lows, while the Nasdaq
recorded 73 new highs and 19 new lows.
(Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)
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