NEW YORK — Investors set aside some of their worries about banks and the economy Friday after the government unveiled its methods for testing the health of banks.
The Federal Reserve report was light on details, but didn’t bring any bad news. Investors were also pleased about quarterly results from Ford Motor Co., American Express Co. and Microsoft Corp.
That cleared the way for a 119-point gain in the Dow Jones industrial average, leaving it down slightly for the week.
The Dow and the S&P 500 broke their six-week winning streak, but the Nasdaq extended its string of weekly gains to seven.
The Fed, in outlining the tests’ methodology, said the 19 companies that hold one-half of the loans in the U.S. banking system won’t be allowed to fail — even if they fared poorly on the stress tests.
Separately, bank executives were briefed on their test results in meetings across the country. By law, the banks cannot publicize the results without the government’s permission, but Wall Street buzzed with anticipation and most financial stocks rose.
The day was not without volatility, however. After the Fed’s release, the stock market at times gave up huge chunks of gains before finishing solidly higher. Financial stocks, were leading the way.
The Dow rose 119.23, or 1.5 percent, to 8,076.29, after rising by as many as 170 points. For the week, the Dow slipped 0.7 percent, the S&P 500 dipped 0.4 percent, and the Nasdaq rose 1.3 percent.
Steve Sachs, director of trading at Rydex Investments, in Rockville, Md., said market has held up well during a week in which about a quarter of the companies in the S&P 500 index have released earnings, including the major banks.
"We are looking for the signs of economic recovery,” he said. "The market clearly is comfortable that it sees the signs of economic stability that it needs to see.”
by the associated press
The Federal Reserve report was light on details, but didn’t bring any bad news. Investors were also pleased about quarterly results from Ford Motor Co., American Express Co. and Microsoft Corp.
That cleared the way for a 119-point gain in the Dow Jones industrial average, leaving it down slightly for the week.
The Dow and the S&P 500 broke their six-week winning streak, but the Nasdaq extended its string of weekly gains to seven.
The Fed, in outlining the tests’ methodology, said the 19 companies that hold one-half of the loans in the U.S. banking system won’t be allowed to fail — even if they fared poorly on the stress tests.
Separately, bank executives were briefed on their test results in meetings across the country. By law, the banks cannot publicize the results without the government’s permission, but Wall Street buzzed with anticipation and most financial stocks rose.
The day was not without volatility, however. After the Fed’s release, the stock market at times gave up huge chunks of gains before finishing solidly higher. Financial stocks, were leading the way.
The Dow rose 119.23, or 1.5 percent, to 8,076.29, after rising by as many as 170 points. For the week, the Dow slipped 0.7 percent, the S&P 500 dipped 0.4 percent, and the Nasdaq rose 1.3 percent.
Steve Sachs, director of trading at Rydex Investments, in Rockville, Md., said market has held up well during a week in which about a quarter of the companies in the S&P 500 index have released earnings, including the major banks.
"We are looking for the signs of economic recovery,” he said. "The market clearly is comfortable that it sees the signs of economic stability that it needs to see.”
by the associated press
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