Wall Street up on optimism about economy
Stocks rose on Friday, with growth-related shares leading the way as investors focused on a brighter U.S. economic outlook.
Reversing a recent trend of trading in tandem with European stocks, U.S. equities were on track to post their best day this week. European shares <.FTEU3> fell 0.4 percent.
U.S. financials <.GSPF>, which have underperformed the S&P 500 this week, were the strongest of the 10 top sectors in the benchmark index, up 1.2 percent. Credit card company Discover Financial
It is becoming increasingly apparent the (U.S.) economic recovery is becoming self-sustaining, said Jeffrey Saut, chief investment strategist at Raymond James Financial in St. Petersburg, Florida.
Blue chips underperformed compared with the overall market. The S&P 500's more defensive sectors also lagged.
I think we're going to see reallocation (into growth sectors) when it becomes apparent the U.S. is not dipping into another recession, Saut said.
The Dow Jones industrial average <.DJI> dipped 0.83 point, or 0.01 percent, to 11,867.98. The S&P 500 <.INX> gained 5.01 points, or 0.41 percent, to 1,220.76. The Nasdaq Composite <.IXIC> gained 17.72 points, or 0.70 percent, to 2,558.73.
Volume was higher than in the past days, with traders citing index rebalancing and options expiration as the culprits.
The volume (uptick) is not a signal that the tide has turned. It is only a sign of index re-allocations and option expiry, Ken Polcari, managing director at ICAP Equities in New York, said in a note.
Online game maker Zynga Inc
U.S. consumer prices were flat in November as Americans paid less for cars and gasoline, while the 12-month inflation reading fell for the second straight month, which could give the Federal Reserve more room to help a still-weak economy.
Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said subdued inflation will be a long-term positive as consumers benefit from contained prices.
That's one of the reasons you're seeing better consumer (confidence) of late, he said.
Research In Motion Ltd
Shares of Adobe Systems Inc
Data this week suggested a strengthening U.S. economic recovery, giving further support to equities.
Jobless claims fell to a 3-1/2-year low last week and factory activity in parts of the Northeast picked up in December, data showed Thursday.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)
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