Stocks climbed to 2½-year highs, extending their winning streak to a third consecutive week, as the market’s upward momentum helped outweigh another round of tightening in China and unrest in the Middle East.
The Dow Jones Industrial Average rose 73.11 points, or 0.6%, to 12391.25, its highest close since June 2008. The measure rose 1% this week, and has gained 4.8% over the past three weeks, marking its best three-week performance since August.
Among the Dow’s top performers Friday, Caterpillar added 2.4% and Travelers rose 1.9%. Chevron also was strong, up 1.6%, after a U.S. judge delayed a decision on whether to grant an injunction prohibiting the enforcement of an $8.6 billion judgment against the oil company over environmental damage in Ecuador’s Amazon region.
The Nasdaq Composite climbed 2.37 points, or 0.1%, to 2833.95, its highest close since October 2007. It is now down just 0.9% from its October 2007 multiyear high.
The Standard & Poor’s 500-stock index added 2.58 points, or 0.2%, to 1343.01, its highest close since June 2008.
“This is a market that just has momentum and it wants to go higher,” said Dan Genter, chief executive and chief investment officer of RNC Genter Capital Management.
The market’s advance came as China’s central bank said it will raise banks’ reserve-requirement ratio by half a percentage point, the second increase this year to withdraw excess liquidity from the economy and curb inflation. The move weighed on the materials sector, which gets much of its demand from China, but the rest of the market shrugged it off.
The climb also came despite additional turmoil in the Middle East, where protesters in Bahrain said security services opened fire on demonstrators as they marched toward the capital’s Pearl roundabout, escalating the standoff between the country’s Sunni Muslim rulers and its Shiite majority population.
Investors said there are concerns that the Middle East presents risks the market isn’t accounting for.
“Some of the geopolitical events we’re seeing in the Middle East do pose another risk,” said Rob McIver, co-portfolio manager of the Jensen Portfolio. “It’s interesting that that’s not having more of a negative effect on the bulls at the moment.”
Campbell Soup fell 3.9%, after the company cut its earnings outlook for this fiscal year amid competition for soups, sauces and drinks. The lowered guidance comes after Campbell reported a 7.7% decline in fiscal second-quarter earnings as more promotions again failed to boost soup sales. Revenue missed analysts’ expectations.
Red Robin Gourmet Burgers jumped 13%. The casual restaurant chain’s fourth-quarter earnings rose 37% to beat its downbeat forecast as higher traffic boosted revenue. Chief Executive Steven Carley said the company is implementing “significant initiatives” to increase same-store sales, reduce expenses, improve restaurant-level margins and drive overall corporate profitability.
JDS Uniphase fell 5.3%. Citigroup cut its investment rating on the stock to “hold” from “buy,” saying the shares are “likely to take a breather following massive outperformance” lately. The firm said the downgrade was “driven by stock price concerns rather than underlying trends.”