Yen plan, bank dividends pull stocks higher
Friday, March 18, 2011
NEW YORK (AP) — Stocks ended a rough week with slight gains Friday after Libyan government forces declared a cease-fire and a group of the world’s seven largest countries announced a plan to bring the yen down from historic highs.
Financial stocks rose after JPMorgan and other large banks increased their dividends. JP Morgan said it was increasing its dividend to 25 cents a share from 5 cents. Wells Fargo and U.S. Bancorp also raised their dividends.
Japan’s currency has soared since an earthquake struck the country a week ago and caused devastating tsunami waves and damage to several nuclear plants. A stronger yen makes it more difficult for Japan’s export-driven economy to recover by making Japanese goods more expensive overseas.
“This is a bit of a relief rally,” said Paul Zemsky, head of asset allocation at ING Investment Management. “The situation in Japan looks to be stabilizing, or at least not getting any worse, and it looks like it may be solvable.”
News early Friday that Libya’s foreign minister had declared a cease-fire helped push stocks higher, but opposition forces said shelling was still occurring after the announcement and they accused the Libyan government of lying. Britain and France were taking the lead in plans to enforce a no-fly zone over Libya.
The Dow Jones industrial average gained 83.93 points, or 0.7 percent, to 11,858.52. The Standard & Poor’s 500 index rose 5.49, or 0.4 percent, to 1,279.21. The Nasdaq composite index gained 7.62, or 0.3 percent, to 2,643.67.
All three stock indexes ended the week lower after markets were battered by worries over Japan’s ability to get its nuclear crisis under control. The Dow lost 1.5 percent, the S&P 500 1.9 percent and the Nasdaq 2.6 percent.
Japan is the world’s third-largest economy after the U.S. and China and buys 10 percent of U.S. exports. Tokyo’s benchmark Nikkei index closed 2.7 percent higher after the announcement from the Group of Seven nations late Thursday.
Thousands of people have been killed in the earthquake and tsunami that followed, and hundreds of thousands are homeless. Quake damage and power cuts have forced Toyota Motor Corp. and other manufacturers to suspend production in parts of the country.
Oil prices hovered between small gains and losses after Libya’s foreign minister declared a cease-fire. The announcement came hours after the Union Nations authorized air strikes against the country.
Nike Inc. fell 9 percent after the company’s earnings came in below what analysts were expecting. Nike said rising costs would cut into its profits over the second half of the year, even as sales increased.
More than two stocks rose for every one that fell on the New York Stock Exchange. Consolidated trading volume was 5.3 billion shares.
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