The Dow Jones Industrial Average gained 50 points, or 0.4 percent to 12,220.59. The Nasdaq Composite Index increased 0.24 percent, or 6.64 points, while the S&P 500 Index jumped 0.32 percent, or 4.1 points.
Stock market volatility also decreased. The Chicago Board Options Exchange’s Volatility Index (VIX), a barometer of investor fear or anxiety, fell as investors are experiencing greater confidence in recent macroeconomic readings, despite uncertainty with Portugal’s budget and new violence in Syria and continued unrest in North Africa.
Investors Unfazed
“That does not seem to be slowing down these markets,” said Jeffrey Kilburg of Menlo Park, Calif.-based Treasury Curve LLC. “Right now it’s the end of the quarter and we’re doing some window dressing, but I think there could be a little bit of a drop off here, some profit taking.”
“You can see the false sense of security by the lack of volume,” he continued.
Investors are looking past geopolitical and commodity concerns to the growing confidence in the economic recovery efforts. The Bureau of Economic Analysis on Friday released its revised real GDP report of the fourth quarter, showing a 3.1 percent annualized growth, up from previous estimates of 2.8 percent.
At least on Friday, the technology sector led the charge—two main service providers Accenture Plc and Oracle Corp. posted positive earnings and outlooks. In addition, the U.S. government revised upward its 2010 fourth-quarter GDP growth data, showing a bigger GDP growth than originally thought.
Shares of Oracle, one of the biggest business software companies, gained 1.6 percent last Friday as the company reported stronger-than-expected fiscal third-quarter earnings, which increased by 78 percent, and healthy margins. Management and technology consulting firm Accenture also posted strong earnings, while providing a favorable future outlook for its business. Shares of Accenture jumped 4.5 percent.
But not all stocks fared so well. As electronics retailer Best Buy’s shares slumped 3 percent as Citigroup analysts downgraded its stock to a sell rating.
Smartphone manufacturer Research In Motion Ltd. (RIM) saw its stock drop 11 percent last Friday after the company announced that current quarter earnings and revenues will come below expectations. RIM also announced that its upcoming tablet computer will run Android applications, which is all but admitting that it is having difficulty in the marketplace competing with Apple’s iOS and Google’s Android mobile platforms.
Analysts expect this week to be low-volume, as fund managers sell off money-losing stock and buy well-performing ones in an effort to boost their returns picture at quarter end.
So far this year, energy has been a big winner, with the S&P Energy Index (.GSPE) gaining 14 percent in the quarter. Both the North Sea Brent Crude as well as Texas Crude are trading around two-year highs as supply concerns continue to dominate headlines.
First-quarter earnings season will kick off in the second week of April.
