NEW YORK, April 22 — US stocks posted their first weekly advance since the end of March as bond yields rose amid gains in industrial and financial companies.
While the “Trump Trade” may not be the force it was in the months after the election, it showed some signs of life as the S&P 500 Index rallied 0.9 per cent in its biggest weekly gain in two months.
Eight of 11 industry groups climbed, with industrial stocks advancing 2 per cent and financials gaining more than 1 per cent. The Dow Jones Industrial Index increased 0.5 per cent, weighed down by earnings-related declines in Goldman Sachs Group Inc and IBM Corp.
The geopolitical concerns that had loomed over markets early this month eased as the focus in Washington shifted to domestic policies including tax reform and financial regulation.
President Donald Trump spent the week talking tough about trade and foreign workers, and signing executive orders directing federal agencies to study trade policy and prepare a tax-reform plan for next week.
The CBOE Volatility Index fell to 14.6 after spiking to 15.96 last week, the highest level since the presidential election. The gauge of options prices is still trading above its year-to-date average level of 12.1.
“The S&P 500 has shown remarkable resiliency in the face of several challenges including perceived delays in legislating key GOP agenda items, a declining 10-year Treasury yield and weaker cyclical stocks,” Tobias Levkovich, chief US equity strategist at Citigroup Global Markets Inc, wrote in a note yesterday.
Industrial companies were the biggest gainers this week as all but seven companies in the 67-member advanced. CSX Corp jumped 9.4 per cent after reporting earnings that beat analysts’ estimates and receiving ratings upgrades.
Snap-On Inc climbed 8.6 per cent on better-than-estimated earnings as Trump appeared at the company’s headquarters to give a speech on making products in America.
Consumer discretionary stocks had their best week since the first five days of 2017, rising 1.9 per cent. Fourteen companies in the group have so far reported earnings this season, with an average earnings surprise of 9.6 per cent, according to data compiled by Bloomberg. — Bloomberg