Stocks open higher, extend gains for 4th day
NEW YORK (AP) – Stocks mostly rose Friday as investors tried to extend Wall Street's gains for a fourth straight day amid more encouraging comments from bank executives and better-than-expected trade data.
Reports that Citigroup Inc.'s chairman Richard Parsons said the bank doesn't need additional government support after receiving three rounds of emergency funding helped lift financial stocks.
The reports came a day after Bank of America Corp.'s chief executive Ken Lewis said his bank was profitable in January and February, extending a streak of optimism about financial shares that began on Tuesday when Citigroup said it was having its best quarter since 2007.
The three-day rally that ensued has lifted the Dow Jones industrials nearly 10 percent.
The market has been quick to embrace the encouraging signs about the financial system after weeks of unrelenting selling spurred on by concerns that the government's efforts to break a freeze in lending weren't working.
A government report Friday showing that the U.S. trade gap narrowed in January also helped buoy the market.
The Commerce Department said the trade imbalance dropped to $36 billion in the first month of the year, a 9.7 percent decline from December and the lowest level since October 2002. The improvement reflects a drop in demand for crude oil imports and other foreign goods.
Stocks have also been lifted this week by surprisingly positive reports from companies across a wide range of industries. General Motors Corp. said Thursday it wouldn't need the latest installment of government bailout money, and General Electric Co.'s credit rating cut on the same day wasn't as bad as some had feared.
Analysts caution, however, that the rally could be short-lived.
"We are going to remain cautious because the slightest bit of bad news could turn this thing around," said Joe Arnold, investment adviser at Dawson Wealth Management.
In the first hour of trading, the Dow Jones industrial average rose 28.11, or 0.4 percent, to 7,198.17. The Standard & Poor's 500 index gained 2.35, or 0.3 percent, to 753.09, while the Nasdaq composite index slipped 1.89, or 0.1 percent, to 1,424.21.
The Russell 2000 index of smaller companies slipped 0.39, or 0.1 percent, to 389.73.
About five stocks rose for every three that fell on the New York Stock Exchange, where volume came to 200.2 million shares.
There was renewed hope Friday for fresh stimulus measures in China and Japan. Chinese Premier Wen Jiabao says the government is ready to rollout even more measures, while Japan's prime minister is calling for a new stimulus package.
The news, which sent overseas markets surging, comes ahead of the gathering of finance ministers and central bankers from the Group of 20 countries on Friday and Saturday. Europeans are calling for greater oversight of financial markets, while the U.S. is backing bigger stimulus spending.
Analysts said technical factors that have helped drive the market this week are likely to continue Friday, including short-covering, when traders buy stock to cover "short" bets, or bets that a stock will fall.
Also feeding optimism about banks this week was news that an accounting board may recommend an easing of financial reporting rules of tough-to-sell assets. Banks say a change in so-called "mark-to-market" accounting rules would help their bottom lines.
Meanwhile, the Securities and Exchange Commission has said it is considering reinstating the "Uptick Rule." The rule, eliminated in 2007, is aimed at curbing short-selling, which can exacerbate stock declines.
Citigroup shares added 16 cents, or 9.6 percent, to $1.83, while Bank of America shares rose 30 cents, or 5.1 percent, to $6.15.
Bonds were mixed early Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.91 percent from 2.86 percent late Thursday. The yield on the three-month T-bill fell to 0.19 percent from 0.22 percent late Thursday.
The dollar fell against other major currencies, while gold prices rose.
Light, sweet crude for April delivery rose 6 cents to $47.09 a barrel on the New York Mercantile Exchange.
Earlier, Japan's Nikkei stock average jumped 5.15 percent, while Hong Kong's Hang Seng index rallied 4.37 percent. In afternoon trading, Britain's FTSE 100 was up 1.85 percent, Germany's DAX index was up 1.38 percent, and France's CAC-40 was up 1.58 percent.