Extending biggest gains for a third session on Friday, the US stocks closed the wild week with a rally that was fuelled by high expectations for the monetary policy to remain easy among major central banks for the anticipated future.
With an increase of 3.1 percent, the S&P 500 index recorded its best weekly performance in roughly two months amid the energy shares rebounding continuously. The 3.1 percent jump led the benchmark index’s advance closing the week with a 9.7 percent gain, which is the biggest weekly surge since December 2011 by the index.
Referring to the Federal Reserve Bank’s policy statement that came on Wednesday, Rockwell Global Capital chief market economist Peter Cardillo said, “All in all it’s been an exciting week for stocks, and I think the year-end rally is in full force. The Fed has made it quite clear that they are going to be patient, and the market is cheering that.”
The Dow Jones Industrial Average advanced 26.65 points or 0.1 percent to 17804.80, while the Nasdaq Composite Index gained 16.98 points or 0.4 percent to 4765.38.
The blue-chip index Dow Jones Industrial Average added three percent posting a weekly gain, which is the highest one-week move since October this year.
Paul Nolte, senior vice president, portfolio manager at Kingsview Asset Management, said, “The Fed is going to sit on their collective hands for at least the first half of the year, if not longer. The expectation coming in was what, why and how were they going to raise rates, and nothing was said.”
According to the market analysts, the major driver of the rally for this week has been the US central bank’s policy statement on Wednesday saying to take a “patient” approach toward increasing the interest rates early next year. The commitment by the Fed Reserve has brought great relief to the investors over the policy outlook.