Wall Street advances as data outweighs budget cuts

NEW YORK Fri Mar 1, 2013 4:29pm EST

1 of 4. Trader Warren Meyers works on the floor of the New York Stock Exchange, March 1, 2013.

Credit: Reuters/Brendan McDermid (UNITED STATES - Tags: BUSINESS)

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NEW YORK (Reuters) - Stocks advanced modestly on Friday, leaving the S&P 500 with slight gains in a volatile week as strong economic data overshadowed growth concerns in China and Europe and let investors discount the impact of expected government spending cuts.

Stocks opened sharply lower for the session as Asian factories slowed and European output fell, but most of the losses evaporated after a report showed manufacturing activity expanded last month at its fastest clip in 20 months.

Consumer sentiment also rose in February as Americans turned more optimistic about the job market.

With $85 billion in government budget cuts set to begin, President Barack Obama blamed Republicans for failure to reach a compromise to avert the cuts, known as sequester. But the stock market appeared to have already priced in the failure by legislators to reach an agreement.

"We were able to dig out of that hole, but not make any great strides on it either," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "We will probably be in a holding pattern pending some big development on a broader budget deal."

The Dow Jones industrial average .DJI gained 35.17 points, or 0.25 percent, to 14,089.66 at the close. The Standard & Poor's 500 Index .SPX added 3.52 points, or 0.23 percent, to 1,518.20. The Nasdaq Composite Index .IXIC advanced 9.55 points, or 0.30 percent, to 3,169.74.

For the week, the Dow rose 0.6 percent, the S&P 500 edged up 0.2 percent and the Nasdaq gained 0.3 percent.

The slight gains for equities came during a volatile week that saw markets decline on Monday after uncertain Italian elections, only to rebound in the next two sessions as Federal Reserve Chairman Ben Bernanke defended the central bank's stimulus measures.

The low interest rates due to the Federal Reserve's accommodative monetary policy have helped equities continue to attract investors. The Dow is less than 1 percent away from its all-time intraday high of 14,198.10. Declines have been shallow and short-lived, with investors jumping in to buy on dips.

Intuitive Surgical (ISRG.O) jumped 8.5 percent to $553.40 after Cantor Fitzgerald analyst Jeremy Feffer upgraded the stock, saying the stock's slide of more than 11 percent on Thursday was a gross overreaction to a news report.

Groupon Inc (GRPN.O) surged 12.6 percent to $5.10 a day after the online coupon company fired its chief executive officer in the wake of weak quarterly results.

Gap Inc (GPS.N) rose 2.9 percent to $33.87 after the clothing retailer reported fourth-quarter earnings that beat expectations and boosting its dividend by 20 percent, while Salesforce.com Inc (CRM.N) posted sales that beat forecasts, driving its stock up 7.6 percent to $182.

Chesapeake Energy Corp (CHK.N) fell 2.4 percent to $19.67 after the U.S. Securities and Exchange Commission escalated its investigation into the company and its Chief Executive Aubrey McClendon for a controversial perk that granted him a share in each of the natural gas producer's wells.

Volume was modest with about 6.72 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, slightly above the daily average of 6.5 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 17 to 13, while on the Nasdaq, seven stocks rose for about every five stocks that fell.

(Editing by Jan Paschal)

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Comments (5)
libertyville wrote:
Is this story from today? I’ve been looking all over and don’t find any article that points to strong U.S. data. Additionally the market has been mostly hovering down today.

Mar 01, 2013 10:47am EST  --  Report as abuse
rpmcestmoi wrote:
You need a copy editor. “Wall Street edges up as data outweighs sequester” is wrong as data is plural and outweighs is singular. PLEASE!

Mar 01, 2013 2:49pm EST  --  Report as abuse
nkirv wrote:
Wall Street wealth is the reason we are having budget cuts and the reason our economy is floundering. Wall Street has insulated itself from our economy, because those finance geeks get rich whether or not the economy is flourishing or tanking.

Therefore, it is no surprise that Wall Street takes no notice of the federal budget cuts, which only affect middle class federal employees. Hedge funds simply adjust their derivatives to take advantage elsewhere.

Wall Street is a leech on our economy as they extract all the wealth and do not give their fair share back. Ask any Goldman or Smith-Barney shark and they’ll all sheepishly admit that everyone on their floor is doing shady deals and cheating their customers.

We need to get rid of corpporate tax breaks and tax all those people who are nothing but an inefficiency in our economy.

Mar 01, 2013 5:50pm EST  --  Report as abuse
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