By Matt Jarzemsky
U.S. stocks rose Friday, with the Dow industrials on pace to cap
their biggest monthly gain since February.
The Dow Jones Industrial Average rose 13 points, or 0.1%, to
17092 in midday trading. The blue-chip benchmark was up 3.2% on the
month and headed for its fourth-straight weekly gain.
The S&P 500 added five points, or 0.3%, to 2002. The Nasdaq
Composite Index rose 13 points, or 0.1%, to 4579.
Stocks have benefited from better-than-expected corporate
earnings, improvement in much of the U.S. economy, and investors'
distaste for low-return prospects in other assets such as bonds.
That positive backdrop has helped stocks to grind higher on a slow
week ahead of Monday's Labor Day holiday in the U.S., for which
stock trading will be closed.
"We're just not getting any kind of significant correction, and
there's nothing out there in the near term that's going to be the
catalyst for that move," said Gordon Charlop, managing director at
New York brokerage Rosenblatt Securities. "It's a slow recovery but
it's a healthy one" for big U.S. companies.
Many investors are still looking to buy shares of companies they
like at any sign of a pullback, he added.
Traders said the level of activity was low Friday, in line with
the market's recent summer lull. So far this week, an average 4.38
billion shares have changed hands daily, 30% below the year-to-date
average, according to FactSet.
Shares of sectors seen as particularly risky outperformed. The
Russell 2000 index of small companies' shares was up 0.7%. The
Nasdaq Biotechnology Index added 0.9%.
Bonds also moved toward closing out a big monthly rally, fueled
by optimism central banks will maintain an accommodative stance
toward markets. The 10-year U.S. Treasury note was little changed
in thin trade Friday, yielding 2.34%. But so far this month, the
note's yield--which moves inversely to its price--is on pace for
its biggest slide since January.
On the economic front Friday, household spending fell 0.1% in
July, the Commerce Department reported, bucking economists' median
forecast for a 0.1% increase. Personal income rose a
less-than-expected 0.2%.
Russian President Vladimir Putin on Friday used harsh language
against Ukraine and its allies over the failure of peace talks.
Ukraine has accused Russia of sending troops to fight alongside
rebels in eastern Ukraine.
European stocks rose Friday, with the Stoxx Europe 600 adding
0.3%, reversing earlier gains. The euro zone's annual rate of
inflation fell to 0.3% in August from 0.4% in July. That is a far
cry from the European Central Bank's medium-term target of
inflation just under 2%. The continued decline in inflation has
added to expectations that the ECB will be forced to take more
aggressive action to boost the region's economic recovery.
In corporate news, Avago Technologies Ltd. rallied 8.8% and hit
a record high after the chip company reported better-than-expected
quarterly results.
In commodity markets, crude-oil futures rose 0.3% to $94.83 a
barrel. Gold futures fell 0.3% to $1,286.70 an ounce.
Write to Matt Jarzemsky at matthew.jarzemsky@wsj.com