UNITED States stocks rose last week, sending the Standard & Poor's 500 Index to the highest level since January, on speculation global economic growth will drive demand for personal computers and fuel.
Intel Corp led semiconductor companies in the S&P 500 to a 2008 peak on a Friedman Billings Ramsey & Co report that orders are improving. Peabody Energy Corp joined 19 other S&P 500 fuel producers in reaching 52-week highs as crude oil surpassed US$127 a barrel for the first time. Most stocks declined last week after consumer confidence dropped to a 28-year low.
The S&P 500 climbed 2.7 percent last week to 1,425.35, the highest since January 3. The Dow Jones Industrial Average rose 1.9 percent to 12,986.80. The Nasdaq Composite Index added 3.4 percent to 2,528.85. The Russell 2000 Index of small-cap stocks advanced 2.9 percent to 741.17.
"We seem to have experienced a mid-cycle slowdown, not a hard landing," said David Goerz, the San Francisco-based chief investment officer at Highmark Capital Management, "If you don't have an economic slowdown, technology should work well."
The S&P 500 extended its rebound from a 19-month low in March to 12 percent. The recovery followed seven interest-rate cuts by the Federal Reserve, which also extended a record US$14.4 billion in direct loans to commercial banks to facilitate lending. The worst housing slump in a generation hurt the value of mortgage-related investments. Financial companies in the S&P 500 reported an 88-percent decline in first-quarter earnings, according to Bloomberg News data. Excluding banks, brokerages and real-estate firms, average earnings rose 8.3 percent for the S&P 500, based on reports by 353 firms since April 7.
Reporting week
Companies scheduled to report first-quarter results this week include Hewlett-Packard Co, which suffered the biggest decline among the 30 firms in the Dow average last week after agreeing to buy Electronic Data Systems Corp for US$13.2 billion.
Hewlett-Packard, the biggest personal-computer maker, fell 3.8 percent to US$47.29 on concern the price-tag for EDS is too high. EDS, the second-largest computer-services provider after International Business Machines Corp, jumped 29 percent to US$24.33 for the biggest gain in the S&P 500.
Intel, the world's largest chip maker, rose 7 percent to US$25. A Friedman Billings Ramsey analyst said last week semiconductor firms will gain from improving global demand for PCs.