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article imageU.S. stocks continue stalwart climb in a show of strong recovery

By Simon Crompton     Jun 18, 2014 in Business
Signs of economic recovery are soaring as U.S. stocks pushed passed a winter slowdown, according to recently released economic data.
For fourth straight day on May, the Standard & Poor’s Index rose and reached another all-time high, closing at just above 1,900 on Friday May 23rd, after many months. After continual drops in pricing, stocks for small companies and riskier markets, such as Internet and biotech organizations, happily greeted gains as well.
Fueled by a surge in demand for military aircraft, orders for more expensive items rose unexpectedly in April, as reported by the government.
In addition to this, the consumer confidence index maintained by the Conference Board climbed in May to its second-highest level since January 2008.
"Everyone's been continuing to look for signs about whether the economy is picking up some speed," said Edward Jones investment strategist Kate Warne. The promising news on manufactured goods "is one more piece of evidence suggesting that it really was weather and not something else slowing growth in the winter time."
The S&P 500’s index climbed by 11.38 points, or 0.6 percent, to close out at 1,911.91 on Tuesday the 27th of May after Monday’s Memorial Day holiday.
The Dow Jones industrial average rose by 69.23 points, or 0.4 percent to finish at 16,675.50, while the Nasdaq composite closed at 4,237.07, gaining 51.26 points, or 1.2 percent.
Right from the opening bell on that Tuesday, stocks made their continual climb which Banc de Binary experts blamed on the optimistic durable goods report. Of the 10 sectors that make up the S&P 500, nine made a steady climb upward, led by the industrial and finance industries.
While stocks rose, bonds had a similar, but smaller increase; surprising, because bond prices tend to trail as stocks rise.
Ten-year Treasury note yields fell to 2.51 percent from 2.53 percent on Friday the 23rd, which sits close to the lowest rate in 10 months, falling from the 3 percent it was trading at from the start of the year.
Jeff Knight, head of global asset allocation at Columbia Management, cites the bond surge as one of the reasons for the climb in stocks. Although expensive, stocks still look good when compared to bonds in terms of return.
"Stocks are still very attractive relative to bonds, and I think that's the key trade-off," said Knight.
Contrary to what many analysts predicted, bonds have made a stronger showing over stocks thus far, while stocks have made minimal gains. Yet, the tables have now turned toward stocks, showing signs of a strengthening economy.
Big movers on the stock market include Bank of America, rising 50 cents, or 3.4 percent, to $15.22 after announcing a resubmission of its operations review to the Federal Reserve one month after finding errors in an initial report.
The bank was forced to forego a dividend increase and a plan to buy back shares.
Staples fell 23 cents, or 2 percent, falling to $11.42 following a negative earnings outlook shared by Goldman Sachs. The forecast is in light of Staples’ ongoing investment and diversification program that does not seem to be yielding a positing profit margin.
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