NEW YORK: U.S. stocks traded higher for the week as investors digested a batch of economic data from the country and Federal Reserve Chair Janet Yellen’ s latest remarks. For the week, all three major indices posted sharp gains, with the Dow, the S&P500 and the Nasdaq going up 1.04 percent, 1.41 percent and 2.59 percent, respectively. In the week ending July 8, the advance figure for seasonally adjusted initial claims was 247,000, a decrease of 3,000 from the previous week’s revised level, the Labor Department said Thursday. In a separate report, the department said that the seasonally adjusted Producer Price Index for final demand increased 0.1 percent in June, seasonally adjusted, above economists’ expectations.
The Consumer Price Index for All Urban Consumers was unchanged in June on a seasonally adjusted basis, the labor department reported on Friday. Over the last 12 months, the all items index rose 1.6 percent. Moreover, advance estimates of U.S. retail and food services sales for June 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were 473.5 billion U.S. dollars, a decrease of 0.2 percent from the previous month, and 2.8 percent above June 2016, said the commerce department. Investors also kept an eye on the closely-watched Yellen’s testimony before the congress.
Janet Yellen, chair of the Board of Governors of the Federal Reserve System, in a testimony prepared for delivery to the U.S. House Financial Services Committee Wednesday, said the U.S. economy should continue to expand over the next few years, allowing the central bank to keep raising interest rates.”The committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices,” she said. She added that the central bank is likely to start reducing its massive 4.5-trillion-dollar balance sheet later this year. The Fed bolstered the balance sheet as a way to stimulate the economy during and after the financial crisis. In addition, Yellen said the Fed is monitoring low inflation as it remains one of the major uncertainties in the economic outlook. “There is, for example, uncertainty about when — and how much — inflation will respond to tightening resource utilization,” she said.
In corporate news, JPMorgan Chase reported quarterly net income of seven billion U.S. dollars, up 13 percent year-on-year. Earnings per share were 1.82 dollars, or 1.71 dollars excluding a gain from a legal settlement, far higher than market estimates. Wells Fargo reported second-quarter diluted earnings per share of 1. 07 dollar, beating Wall Street expectation. But its revenue came in at 22.17 billion dollars, lower than market expectation.