The week that was with Michael Pascoe
The end of a week of genuine greatness for the Australian economy and all who sail in her.
US stocks ended higher on Friday, extending the rally to a five-day gain, as investors anticipated positive news from next week's key earnings reports, while bullish broker comments boosted tech shares.
International Business Machines Corp, rose 3 per cent to $US125.93, leading the Dow higher after Barclays Capital raised its price target to $US140 from $US119, and upgraded the information technology hardware sector to "positive" from "neutral."
The Dow Jones Industrial Average ended up 78.07 points, or 0.80 per cent, at 9,864.94. The Standard & Poor's 500 Index gained 6.01 points, or 0.56 per cent, to 1,071.49. The Nasdaq Composite Index rose 15.35 points, or 0.72 per cent, to 2,139.28.
Australian markets are pointed higher. In overnight trading the SPI share futures index was up 34 points to 4783, ABC radio reported. Yesterday, the benchmark S&P/ASX 200 index ended 15.7 points lower, or 0.3 per cent, at 4752.9 and the All Ordinaries, while the All Ordinaries index slipped 8.8 points, or 0.2 per cent, to 4754.5.
The Australian dollar was also little changed overnight against the US dollar, buying 90.4 US cents. It strengthened, though, against other currencies, buying 81.1 yen, 57.05 pence and 61.4 euro cents.
Separately, Deutsche Bank predicted late Thursday that semiconductor companies would report upside surprises in their earnings for the past three months.
The Philadelphia Semiconductor index climbed 3.3 per cent, while another Dow component Intel rose 1.5 per cent to $US20.17.
Both IBM and Intel are scheduled to report quarterly results next week.
"The mood is ... reasonably optimistic (on earnings) which is part of the reason why we have seen 3-4 per cent gains so far this week," said Fred Dickson, market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.
For the week, the indexes marked their best weekly gains since July, snapping a two-week losing streak. The Dow was up 4 per cent and the Nasdaq rose 4.5 per cent. The S&P 500, which has climbed nearly 60 per cent from a 12-year closing low in early March, also gained 4.5 per cent for the week.
Merger moves
Two large merger deals attracted investor attention on Friday.
Kimberly-Clark said it plans to acquire I-Flow Corp, for $US324 million, sending I-Flow shares up 7 per cent to $US12.58 on Nasdaq. Kimberly-Clark rose 0.3 per cent to $US59.26 on the New York Stock Exchange.
Citigroup agreed to sell its Phibro commodities trading business to Occidental Petroleum Corp. Citi's stock fell 0.4 per cent to $US4.63 while Occidental's stock was down 0.7 per cent at $US79.54.
According to the Commerce Department, the US trade deficit unexpectedly narrowed in August, as trade in services pushed exports slightly higher and imports fell by a fractionally larger amount.
Stocks briefly dipped at the open on Friday, pressured by a rebounding US dollar after Fed Chairman Bernanke said the Fed will eventually have to start tightening its monetary policy as the economy heals.
Volume was below average on the New York Stock Exchange, with 989.9 million shares changing hands, under last year's estimated daily average of 1.49 billion.
On the Nasdaq, about 1.95 billion shares traded, also below last year's daily average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 3 to 2, while on the Nasdaq, about two stocks rose for every one that fell.
Reuters, with BusinessDay
