NEW YORK: Stocks climbed in a shortened trading day on Friday, giving the Standard & Poor’s 500 index its biggest weekly rally since June, after data showed German business confidence unexpectedly expanded and the American holiday shopping season began.
Hewlett-Packard, Dell and Advanced Micro Devices gained more than 4.1 percent as computer companies led the advance. Research In Motion Ltd. jumped 14 percent in U.S. trading after an 18 percent increase in Toronto Thursday on optimism over the BlackBerry maker’s newest smart phones. Macy’s and Bed Bath & Beyond added at least 1.7 percent as millions visited stores on the retail shopping day known as Black Friday.
The S&P 500 rose 1.3 percent to 1,409.15 for its biggest gain on the day after Thanksgiving since 2007. The index rose 3.6 percent this week. The Dow Jones industrial average added 172.79 points, or 1.4 percent, to 13,009.68.
“People are trying to get a sense of what the holiday shopping season will be in the U.S.,” said James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management. “It’s good news that business confidence is picking up in Germany.”
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October, the first gain in eight months. Economists predicted a drop to 99.5, according to the median of 48 forecasts in a Bloomberg News survey. French business confidence increased from the lowest in more than three years this month, a separate report showed.
European Union leaders deadlocked over the next seven-year budget, adding to the quarrels between rich and poor countries that have stymied the response to the euro debt crisis. The positions are still “quite far apart,” German Chancellor Angela Merkel told reporters as the meeting resumed Friday.
The S&P 500 rallied for a fifth day in the longest streak since August after housing data exceeded economists’ forecasts.
“People are going to need a little bit more confidence about the political class being able to work out a deal,” Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc. said. “Both sides prefer to get this done before the end of the year.”
Technology shares had the biggest gain in the S&P 500 among 10 industries, climbing 1.6 percent. HP advanced 4.2 percent to $12.44, while Dell jumped 5.4 percent to $9.55. Advanced Micro Devices, the second-largest maker of personal-computer processors, increased 4.3 percent to $1.95. The three stocks have had the biggest declines in the S&P 500 Information Technology Index this year, slumping at least 34 percent.
RIM surged 14 percent to $11.66 in U.S. trading. RIM’s Canadian shares had their biggest gain in more than three years Thursday after National Bank Financial lifted its price target for U.S. shares to $15 from $12, saying new BlackBerry 10 sales should be better than expected. It followed a Nov. 20 report from Jefferies & Co. that said chances are improving that the new BlackBerry 10 smart phones will revive sales when they hit stores in February.
A measure of retailers in the S&P 500 gained 1.1 percent. Macy’s, the second-largest U.S. department-store chain, added 1.8 percent to $41.73. Bed Bath & Beyond, the operator of more than 1,000 home-furnishing stores, rose 2.1 percent to $60.16.
Higher-income Americans may refrain from spending cuts in the holiday shopping season even though their taxes are poised to rise, said Jack A. Ablin, chief investment officer at BMO Harris Private Bank. He studied a ratio that compares the stock performance of three retailers catering to wealthier consumers and three other chains focusing on lower-income shoppers.
Shares of the high-end stores have done better in this year’s second half as the federal government approaches the fiscal cliff. Income-tax cuts under President George W. Bush are due to expire at year-end, and a new levy to help finance expanded health-care coverage will be imposed.
“Investors believe that high-income households will fund their higher tax burden from savings, rather than by cutting spending,” wrote Ablin, who is based in Chicago.
Ablin cited Nordstrom, Coach and Ralph Lauren as high-end retailers and Wal-Mart Stores, Family Dollar Stores and Dollar Tree as low-end merchants.
Since falling to this year’s low on June 26, the ratio between these indexes has climbed 21 percent. Nordstrom’s and Ralph Lauren’s shares have gained as much as 20 percent during this period. Dollar Tree’s stock, on the other hand, has lost as much as 32 percent.
Separately, oil prices climbed Friday after Israeli troops fired on crowds in Gaza surging toward the border fence, killing one Palestinian. Benchmark crude ended the trading day up 90 cents to $88.28 a barrel.
Traders are also looking ahead to the next meeting of the Organization of the Petroleum Exporting Countries on Dec. 12.
Wholesale gasoline lost nearly 6 cents to $2.74 a gallon.