After the Dow Jones Industrial Average touched 13,000 points and Nasdaq reached a fresh yearly high, the focus is now shifted towards S&P 500 whether it will cross the yearly high in the coming week. Only 9.4 points separate the index from 52-week high. This could be possible on good earnings number from technology companies such as Dell and Hewlett Packard (HPQ), solution to Greece impasse and the favorable economic indicators.
Generally, economic indicators world over have boosted the market sentiments to see the markets post gains for the week. Germany's consumer confidence, its economic activities and France better than anticipated economic indications from the Euro Zone favorably added to sentiments. Japan has also come back strongly with its economic activities after the tsunami and earth quake struck the nation badly early last year.
If these things were the global cues, back on the home turf, improved job market and housing data has lifted the investors' appetite for quality stocks. There were also some disappointments on economic indicators such as retail sales data and industrial production. General Motors, whose earnings missed estimations, also provided clues about its North American operations and European Union restructuring to further add color to markets upside movements.
The Dow Jones Industrial Average ended the week with 148.9 points or 1.2 percent gain at 12,950.1 points, while S&P 500 edged up 18.6 points or 1.4 percent to end the week at 1,361.23 points. Nasdaq advanced 47.9 points or 1.7 percent to close at 2,941.78.
The Government data on retail sales and industrial production for January was not only disappointing, but also indicated somewhat a slower growth rate for first quarter GDP of around 2 percent annualized pace on top of a 2.8 percent annualized pace in the fourth quarter. But these disappointments could possibly have been due partly to weather related issues too.
Though manufacturing managed to advance at a 0.7 percent pace, the growth was moderate on top of December's 1.5 percent upside. Nondurable consumer goods production remained strong with significant gains in autos, appliances, furniture and carpeting production. In a note to clients, Wells Fargo expects manufacturing expansion at a moderate pace in February too. Though Empire manufacturing survey's early read indicated a solid gain in general business conditions and shipments, weaker trend in new orders expansion could spoil the beans thereby moderating the overall picture.
The weather aspect became an important factor as January 2012 recorded fourth warmest on record. The early arrival of spring to many parts of the U.S. weighed down heavily on sales of clothes in January. Increased gas prices also stole sales from other retailers.