Wall Street on Friday closed higher for the first time in a week, lifted by rising tech stocks, while oil prices slumped 5 percent on receding fears about Middle East fighting disrupting supplies.
U.S. Treasury debt prices jumped on government data indicating U.S. economic growth was slowing and the dollar was down, while gold had its first losing day after a seven-session rally.
The major U.S. stock indexes snapped a four-day losing streak after the Wall Street Journal reported chipmaker Intel Corp is in talks to buy rival Altera Corp. Chipmakers bounced, led by a 28 percent gain in Altera.
“We’ve seen a lot of M&A news recently and it’s helping the market,” said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. “There is definitely an M&A cycle going on, so that is a good thing.”
For the week, however, the Dow lost 2.3 percent, the S&P 500 declined 2.2 percent, and the Nasdaq was off 2.7 percent.
Oil investors’ worries diminished about the conflict in Yemen, which is close to a major chokepoint for oil tankers, and focused on new supplies possibly coming to market after any Iranian nuclear deal.
U.S. crude closed off 5 percent at $48.87 a barrel while Brent ended down 4.7 percent at $56.41.
But oil prices still notched their second straight weekly gain, boosted by the dollar’s recent weakness after a year-long rally.
Late in the trading day Federal Reserve Chair Janet Yellen told an audience in San Francisco an interest rate hike may be warranted later this year although a downturn in core inflation or wage growth could force Fed policymakers to hold off.
The Dow Jones industrial average closed up 34.43 points, or 0.19 percent, to 17,712.66, the S&P 500 added 4.87 points, or 0.24 percent, to 2,061.02 and the Nasdaq Composite gained 27.86 points, or 0.57 percent, to 4,891.22.
Treasury yields fell on U.S. gross domestic product data which signalled slow fourth-quarter growth and reinforced opinions the Fed would push back the launch of its first rate hikes since 2006.
Investors covering short positions along with month-end demand also helped push Treasury yields lower.
Benchmark 10-year notes were last up 15/32 in price to yield 1.95 percent, down from 2.00 percent late on Thursday.
The dollar index, which tracks the greenback versus a basket of six currencies, edged down 0.05 percent to 97.383. The yen was last up 0.01 percent against the dollar at 119.17 yen and the euro was at $1.0899, up 0.15 percent.
Gold fell, ending a seven-day rally on investor caution ahead of Yellen’s comments. Spot gold eased 0.5 percent to $1,198.30 an ounce.
GLOBAL ECONOMIC DATA REVIEW
* Economic activity in the U.S. grew at an unrevised rate in the fourth quarter of 2014, according to the final estimate released by the Commerce Department on Friday. The report said gross domestic product increased by 2.2 percent in the fourth quarter.
* Consumer sentiment in the U.S. deteriorated by less than previously estimated in the month of March, according to a report released by the University of Michigan on Friday. The report showed that the final reading on the consumer sentiment index for March came in at 93.0.
* Germany’s import prices declined at a slower-than-expected pace in February, figures from Destatis showed Friday. The import price index fell 3.0 percent year-over-year in February, below economists’ expectations for a 3.9 percent decrease.
* French consumer confidence improved as expected to the highest level since 2010, survey data from the statistical office Insee showed Friday. The households’ consumer confidence index came in at 93 in March versus 92 in February.
* Sweden retail sales growth slowed notably in February, Statistics Sweden reported Friday. Retail sales rose only 0.2 percent in February from the prior month, when it grew 1.2 percent. Sales were expected to rise by 0.3 percent. On a yearly basis, sales growth slowed to 4.8 percent from 5.1 percent.
* U.K. house price growth softened for the seventh consecutive month to an 18-month low in March, the Nationwide Building Society reported Friday. House prices advanced 5.1 percent year-on-year in March, slower than February’s 5.7 percent increase and a 5.3 percent rise forecast by economists. This was the slowest rate of growth since September 2013.
* Italy’s industrial orders declined in January after recovering in December, the statistical office Istat showed Friday. Industrial orders fell 3.6 percent in January from last month, when it rose 4.5 percent. The decline was driven by a 9 percent fall in non-domestic market.
* Italy’s retail sales grew unexpectedly in January from last year, the statistical office Istat reported Friday. Retail sales grew 1.7 percent year-on-year in January, confounding expectations of 0.3 percent fall.
* The likelihood of a broad and protracted deflation, afflicting wages and prices, is pretty low, Bank of England Deputy Governor Ben Broadbent said Friday. At a Bundesbank conference, BoE Governor Mark Carney said the next move of the central bank will most likely be a hike in interest rate.
* Overall consumer prices in Japan gained 2.2 percent on year in February, the Ministry of Communications and Internal Affairs said on Friday – below forecasts for 2.3 percent and down from 2.4 percent in January. Core CPI, which excludes the volatile prices of food, added an annual 2.0 percent.
* China’s industrial profits dropped in the first two months of the year, the National Bureau of Statistics revealed Friday. Industrial profits fell 4.2 percent year-over-year in the January to February period to CNY 745.24 billion. The rate of decline moderated from the 8.0 percent fall seen in December.
* Singapore’s producer prices declined at a slower pace in February, figures from the Department of Statistics showed Friday. The manufactured products price index fell 11.8 percent year-over-year in February, slower than January’s 13.1 percent sharp decrease.