NEW YORK (MarketWatch) — U.S. stocks erased Friday losses to tally their fifth week of gains, sending the S&P 500 to a four-month high, with disappointing Chinese trade data advancing hopes for further moves to bolster the global economy.
“It’s Europe, China and the U.S. as the three big worries,” said Sandy Lincoln, chief market strategist at BMO Asset Management U.S.
Noting the price-to-earnings expansion that has taken place in the large-cap defensive sectors, Lincoln said the market in recent weeks has seen a rotation back to economically sensitive components.
Assuming we muddle through on the big three — Europe, China and the U.S., the next shift could have investors moving from the economically sensitive large-cap companies to the smaller capitalized, Lincoln noted.
Paul Vigna and Spencer Jakab discuss what could happen if to U.S. falls off the fiscal cliff, and David Benoit looks at the IPO of soccer powerhouse Manchester United. Photo: Getty Images.
After a 70-point drop, the Dow Jones Industrial Average DJIA+0.32% ended up 42.76 points, or 0.3%, at 13,207.95, led by Hewlett-Packard Co. HPQ+1.49% . It rose 0.9% for the week. At five straight weeks, the blue-chip average is in its longest winning streak since October.
The S&P 500 index SPX+0.22% ended up 3.07 points, or 0.2%, to 1,405.87, with telecommunications the best performer and consumer staples off the most. The index ended at its highest level since April 3 and extended gains to a sixth straight session.
The S&P has risen 10% from its June 1 closing of 1,278.04, reclaiming the 1,400 level in the past week. It rose 1.1% this week, also its fifth week of gains.
The Nasdaq Composite COMP+0.07% rose 2.22 points, or 0.1%, to 3,020.86 and ended up 1.8% for the week, its fourth straight week of gains.
Volume, however, was low. New York Stock Exchange Composite volume was just over 2.7 billion, its lowest volume day in over a month. Nasdaq Composite volume was just over 1.5 billion, under the 2012 average of 1.74 billion.
Recent gains can be chalked up to “just words with nothing more,” said Peter Boockvar, equity strategist at Miller Tabak in New York, referring to talk from central bankers, which has inspired hope of further moves to bolster the global economy, especially from the European Central Bank.
“We’ve been talking about the tug of war for a while of the slowing global economy on the one hand, and central bankers trying to fight it tooth and nail on the other hand,” Miller Tabak’s Boockvar said of the underlying market issues.
Making its market debut on the NYSE, Manchester United PLC MANU0.00% raised $233.3 million in its IPO, with shares of the English soccer club priced at $14 each, beneath the marketed $16 to $20 range. The stock ended at $14.00 and slid below that price in after-hours trading.
On Thursday, restaurant-chain operator CKE Inc. delayed its IPO.
Friday’s slide had come in reaction to “the China data, even though we didn’t care about it yesterday,” Boockvar said of a report from China’s customs bureau saying the nation’s exports rose a less-than-expected 1% in July from the year-ago period, and imports climbed 4.7%.
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Thursday reports showed China’s industrial output growth at a three-year low, with retail sales below estimates and the inflation rate declining to a 30-month low. Read more on Asia data.
“We don’t move on import prices,” Boockvar added of U.S. data. The Commerce Department said early Friday prices paid for U.S. imports slid 0.6% in July. Read more on import prices.
Kate Gibson is a reporter for MarketWatch, based in New York.