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Equities - Weekly outlook: February 4 - 8

Published 02/03/2013, 10:11 AM
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Investing.com - U.S. stocks rallied for the fifth consecutive week as upbeat data on employment and manufacturing bolstered hopes that the economic recovery is gathering momentum, pushing benchmark indexes toward record highs.

The Dow Jones industrial average closed above 14,000 for the first time since 2007, rallying 1.08% on Friday, 0.8% higher for the week. The S&P 500 advanced 1.01% on Friday, up 0.7% for the week and the Nasdaq jumped 1.18%, 0.9% higher for the week.

The U.S. Department of Labor that the economy added 157,000 jobs in December, slightly below expectations for a 160,000 increase, while the unemployment rate ticked up to 7.9% from 7.8% in November.

However, November and December nonfarm payrolls figures were revised sharply higher to 247,000 and 196,000 respectively.

The Institute for Supply Management said its index of U.S. manufacturing activity rose to a nine month high of 53.1 in January from 50.2 the previous month, while a separate report showed that U.S. consumer confidence improved more-than-expected in January.

In Europe, markets pushed higher on Friday, with the Stoxx Europe 600 up 0.3% at the close, after data showed that manufacturing activity in the euro zone improved in January and inflation and unemployment stabilized, underlining the view that the crisis in the region has turned a corner.

The euro zone manufacturing purchasing managers’ index improved to 47.9 from 46.1 in December, still below the 50 mark that separates contraction from expansion but the slowest rate of contraction in 11 months.

Elsewhere, Asian market were broadly higher after data showed that China’s HSBC manufacturing index hit a two-year high in January, adding to signs of a recovery in the world’s second largest economy.

China's Shanghai Composite Index climbed 1.4% on Friday to close 5.6% higher for the week. Japan's Nikkei rose 0.5% to finish at a 52-week high on the back of ongoing weakness in the yen, up 2.4% for the week.


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