Markets Rally On Weaker Dollar, With Dow Breaking Two-Week Losing Streak
(AP Photo/Richard Drew)
Thanks to the removal of just one word in a monetary policy statement and a subsequent weakening in the U.S. dollar, the equity markets have rallied over the last two-and-a-half trading sessions — and the sea of green was abundant in market action on Friday. All three indices opened for trading in positive territory and only climbed from there, leading the Nasdaq to eventually close above 5,000 points and the Dow to break multi-week losing streaks.
Wednesday’s Fed decision that an interest rate hike could come as soon as June had a diverging effect on the markets that extended into Friday trading: the U.S. dollar dipped 1.5% on the interest rate uncertainty, while stocks rebounded. Also helping the equity markets Friday was a surging biotech sector — led by near-10% gains from Biogen Idec Biogen Idec on positive reports about an Alzheimer’s drug — as well as rebounding oil prices. WTI crude closed Friday trading up 4% at $45.72 (its best daily gain since mid-February); brent crude closed the day up 1.6%, at $55.20 a barrel.
As a result of the weakness in the dollar and strength in oil and biotechs, all three U.S. equity indices finished the day and the week in the green. The Dow Jones Industrial Average closed Friday trading up 168.6 points, or 0.92%; the gains from late Wednesday, Thursday and Friday trading led the index to a 1.67% gain for the week that helped the index break a two-week losing streak. All Dow components except Apple Apple, Du Pont and United Health finished Friday trading in positive territory.
The S&P 500, meanwhile, closed Friday activity up 18.79 points, or 0.9%; it finished the week up 2.23%. And the Nasdaq — which hit a new all-time intraday high Friday — closed the day up 34 points, or 0.68%. It closed the week up 2.8%.
As a further sign that investors were feeling fairly confident in Friday activity, the VIX volatility index — which measures fear in the market — closed the day down 7.5% at 13.02 points, its lowest level in nearly three weeks.
One of the day’s most stellar individual stock performers was biotech company Biogen, which early Friday reported that one of its experimental Alzheimer’s drugs has — in a small, early-stage study — slowed cognitive decline in Alzheimer’s patients. Biogen had alluded to this development in December, but the announcement Friday (which FORBES’ Matt Herper reported here) gave a detailed look at the margins by which patients were helped. The data is giving new (but cautious) hope for Alzheimer’s treatment; less importantly, the study results sent Biogen stock for a 9.76% surge in Friday trading.
Other winners in Friday activity were Nike and Darden Restaurants Darden Restaurants, both of which were up on stronger-than-expected earnings reports. Nike reported Thursday afternoon that it recorded a 7% increase in revenue and a 19% jump in profit; as a result, its shares traded in the green all day Friday, eventually closing for a 3.7% gain. Darden reported its own quarterly results Friday morning, which — thanks to an apparent turnaround from the Olive Garden – came in above Wall Street expectations and gave the stock a 2.9% gain in Friday trading.
One company that did not get a boost from earnings was luxury jeweler Tiffany & Co. The company famous for sparkling silver and little blue boxes reported earnings results that were mostly in line with what analysts expected, but after projecting a 30% decline in first quarter net earnings saw its stock dive into negative territory, eventually closing with a 3.98% loss.
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Markets Rally On Weaker Dollar, With Dow Breaking Two-Week Losing Streak
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