US stocks up for third week


NEW YORK :US stocks edged higher and bonds fell on Friday,in quiet trading ahead of the US Labor Day holiday weekend,on news of surprisingly strong growth in manufacturing in the Midwest. 

The dollar slumped and gold approached 6-1/2 year highs ahead of the three-day weekend.Very tight gasoline stocks continued to buoy oil prices. 

Early Friday,the National Association of Purchasing ManagementChicago said its monthly index of business activity rose to 58.9 in August from 55.9 in July,easily beating forecasts of 55.5. 

The report suggests US factories may see faster growth and should start adding to payrolls in manufacturing,the hardest-hit sector in the recession. 

The Dow Jones industrial average rose 41.61 points,or 0.44%,to 9,415.82.The broader Standard & Poor ’s 500 Index added 5.19 points,or 0.52%,at 1,008.03. 

The technology-laced Nasdaq Composite Index gained 10.40 points,or 0.58%to 1,810.58. 

For the week,the blue-chip Dow rose 0.72%— its fourth straight up week — while the S&&P 500 gained 1.51%and the Nasdaq rose 2.56%.“(The Chicago PMI)helped gains. 

It ’s not that the economic data coming out is overly positive,it ’s just that it ’s not negative,” said Adam Tracy,director of listed trading at Thomas Weisel Partners in San Francisco. 

“It shows the second-half recoveryis still on track.” 

However,volume was paltry as many market players got an early start to the long Labor Day holiday weekend.US stock markets will beclosed on Monday. 

“The market ’s pretty volatile and volume is very light,so it doesn ’t take much to move markets up.We had big swings in the last few days on low liquidity,” Tracy said. 

Stocks have risen sharply since hitting year-lows in early March,as investors have bet on a strong economic recovery picking up later this year.For the month of August,theblue-chip Dow gained 1.97%,the S&P500 rose 1.79%,and the Nasdaq is up4.35%. 

Both the Dow and the S&P 500 have risen for six straight months,while the Nasdaq has racked up seven in a row.It was the longest stretch of monthly gains for both the Dow andNasdaq since 1995,and the longeststreak of up months for the S&P since1998,according to market researchfirm 

In other news on the economy on Friday,the government said US personal spending surged in July,the latest sign of a solidifying economic rebound,though personal incomerose slightly less than expected. 

A separate survey said US consumer sentiment fell in August,as a stagnant labour market made Americans a bit gloomier,but still farmore optimistic than they were during the Iraq war. 

The University of Michigan ’s final August index of consumer sentiment fell to 89.3,below forecasts of 90.5, from 90.9 in July. 

Among stocks making headlines, RadioShack Corp shares rose,after the No.3 US consumer electronics retailer forecast earnings in the current quarter above Wall Street expectations.RadioShack shares rose 90cents,or 3.05%,to US$30.40. 

Novellus Systems Inc fell,a day after it backed its quarterly financial targets but warned of a US$70mil charge to write down older chip making equipment that would deepen its net loss.Shares of Novellus,whichmakes equipment used to buildmicrochips,fell 89 cents,or 2.18%,toUS$39.96.  

Kmart Holding Corp shares jumped after the discount retail chain reported late Thursday a much narrower quarterly loss,its first results since it emerged from Chapter 11 bankruptcy protection in May. 

Shares of Kmart,which filed for bankruptcy in January 2002,rose US$1.23,or 4.18%,to a new year-high of US$30.67. 

The benchmark 10-year US Treasury note fell 12/32 for a yield of 4.47%,up from 4.42%late Thursday. 

Ten-year note yields tested 4.50%right after the NAPM-Chicago report.Two-year notes fell 3/32 to yield1.98%,and five-year notes slid 8/32,yielding 3.46%. 

The 30-year bond was down 4/32for a yield of 5.22%,up from 5.21%lateThursday but well below the recenthigh near 5.50%. 

The dollar settled at US$1.0983against the euro,up from US$1.0884late Thursday.The dollar fell to 116.79yen from 117.35 yen on the surprisingnews that the Bank of Japan had notintervened to weaken the Japanesecurrency in August. 

Overseas,London ’s FTSE Eurotop300 index closed down 1.1%at 896points.In Tokyo,the Nikkei averagerose 118.33 points,or 1.16%,to10,343.55.— Reuters

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