U.S. Stocks Rise Amid Central Bank Stimulus Hopes
08/10/2012| 04:46pm US/Eastern
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--U.S. stocks rise despite weak Chinese data
--Stoxx Europe 600 posts first loss in six sessions
--China's July trade surplus narrows unexpectedly
By Matt Jarzemsky
NEW YORK--Stocks rallied into Friday's close, with the S&P 500 capping its longest streak of gains since late 2010, as investors shrugged off an unexpected drop in China's trade surplus.
The Dow Jones Industrial average rose 42.76 points, or 0.3%, to 13207.95.
The Standard & Poor's 500-stock index added 3.07 points, or 0.2%, to 1405.87, led by the telecommunications and industrial sectors. The gain was the index's sixth-straight, its longest such run since another six-day rally that ended Dec. 14, 2010. The closing level was the highest since April 3.
The Nasdaq Composite Index retreated edged up 2.22 points, or 0.1%, to 3020.86.
Investors said hopes of stimulus from officials such as European Central Bank President Mario Draghi bolstered stocks throughout the week. They're also awaiting Federal Reserve's central banker symposium at the end of the month and the next meeting of the Fed's policy-setting committee, starting Sept. 12.
"In general, the markets have been just kind of inching forward on the hopes of additional policy accommodation," said Andrew Goldberg, global market strategist at J.P. Morgan Funds. "If I'm bearish or pessimistic, do I have much confidence to go out and short or sell against a tape that's been moving higher all week? No."
Stocks had traded lower for most Friday, after China's July trade surplus fell to $25.1 billion from $31.7 billion a month earlier, bucking economists' projections for it to increase. Export and import growth both slowed sharply, indicating continued deceleration in the world's second-largest economy.
"The global situation is slowing, maybe a little more than we thought, and it's really impacting China," said Paul Zemsky, chief investment officer of multiasset strategies at ING Investment Management U.S., which manages $170 billion of assets.
In the U.S., import prices for July slipped 0.6% from a month earlier, the Labor Department reported Friday. Economists expected it to rise 0.1%. Prices fell from the year-earlier month by 3.2%, the biggest decline since 2009.
The U.S. federal budget deficit narrowed during the first 10 months of the government's fiscal year due to higher tax collections, the Treasury Department reported.
European markets were broadly lower, with the Stoxx Europe 600 down 0.1%, halting a five-day streak of gains.
Asian markets also fell, with China's Shanghai Composite slipping 0.2% and Japan's Nikkei Stock Average shedding 1%.
Crude-oil futures slumped 0.5% to $92.87 a barrel, as imports of the commodity by China, the world's second-largest oil consumer, fell in July to the lowest level in nine months. In addition, the International Energy Agency cut its oil-demand growth forecast for 2013.
Gold futures added 0.2% to settle at $1,619.70 an ounce. The dollar gained ground against the euro but slipped against the yen.
In corporate news, shares of Yahoo fell 5.4% after the Internet company said recently appointed Chief Executive Marissa Mayer intends to review, among other things, the company's previously announced plan to return nearly all of the proceeds from the sale of its stake in Alibaba to shareholders.
J.C. Penney climbed 5.9% after executives on a conference call detailed turnaround plans and said the department-store chain has ample cash to fund the changes. In premarket trading, J.C. Penney had fallen after the company reported a wider-than-expected quarterly loss.
Monster Beverage tumbled 11%, the biggest decline among S&P 500 components, after reporting a smaller-than-expected increase in quarterly profit and disclosing a state attorney general probe into the energy-drink maker's marketing and ingredients.
Manchester United was unchanged on its first day of trading on the New York Stock Exchange. The English soccer team's initial public offering had priced below its expected range.
Performant Financial jumped 18% on its first day of trading on the Nasdaq Stock Market. The company, which helps clients recover delinquent assets and improper payments, saw its downsized debut price below its expected range.
Write to Matt Jarzemsky at matthew.jarzemsky@dowjones.com
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