U.S. stocks climbed higher Friday, as fears of increased violence in Libya ebbed and currency interventions helped to relieve investor worries over Japan's economy. The Dow Jones Industrial Average finished Friday with a gain of 83.93 points, or 0.71%, to close at 11858.52, ending a week of tumultuous trading that on Wednesday briefly sent major U.S. indexes into negative territory for the year. It was the Dow's second straight losing week and third down week in the last four.
The Nasdaq Composite, still below even for the year, added 7.62, or 0.29%, to 2643.67 Friday, but losses amid the recent nuclear worries made it the Nasdaq's worst week since mid-August. The Standard & Poor's 500-stock index rose 5.49, or 0.43%, to 1279.21, as it closed out its worst week since November. Stocks pulled back from their highs of the day Friday afternoon as traders prepared their portfolios to ride out a potentially turbulent weekend.
After tumbling for the week's first three days, stocks rose Thursday and added further gains Friday. The latest came after Libya's foreign minister said Moammar Gadhafi's regime had declared an immediate cease-fire in the wake of the United Nations resolution passed late Thursday authorizing military action against Gadhafi's security forces.
On Friday, construction-equipment manufacturer Caterpillar said disruptions in its Japanese supply chain could sporadically affect its assembly plants elsewhere and that it is trying to secure other sources for parts normally produced in Japan. Caterpillar's stock rose $1.94, or 1.9%, to $105.06. Among stocks in focus, a number of companies announced dividends Friday. Among them, Cisco rose 14 cents, or 0.8%, to $17.14, after disclosing its first ever cash dividend. J.P. Morgan Chase jumped $1.18, or 2.7%, to $45.74 and Wells Fargo added 47 cents, or 1.5%, to $31.83.
European stocks ended with modest gains Friday, but fell nearly 3% for the week, as investors digested conflicting reports about the situation in conflict-torn Libya and monitored Japan's nuclear crisis. The Stoxx Europe 600 index gained 0.2% to end at 267.63. Earlier in the session the index had risen as high as 269.78 on news that Libya's government has declared an immediate cease-fire after the United Nations Thursday authorized the use of force to protect civilians in the North African nation. Subsequently, however, media reports said that fierce fighting continued between opposition and pro-government forces despite the announcement of a cease-fire. For the week, the Stoxx 600 index fell 2.8%. In Germany Friday, the DAX 30 index closed up 0.1% at 6,664.40, substantially paring its intraday gains. Chemicals producer BASF SE gained 1.7% after J.P. Morgan upgraded the stock to overweight from neutral, saying it should benefit from rising oil and gas prices. Car makers were also higher, with BMW AG and Daimler AG both up more than 2%. In the U.K., shares of TUI Travel PLC jumped 3.4%, getting a boost from falling oil prices. Electric grid operator National Grid PLC rose 4.4% after regulators issued a new revenue framework for the utilities sector that analysts said was regarded as less onerous than a previous draft. The gains helped lift the FTSE 100 index, which ended up 0.4% at 5,718.13. European investors also digested news that the Group of Seven intervened jointly in currency markets to halt the rising Japanese yen. In France, the CAC 40 index rose 0.6% to 3,810.22, led by a 3.2% rally for Schneider Electric SA as the company's shares continued to recover from heavy recent selling.
Tokyo led most Asian markets higher Friday after some of the world's largest economies agreed to put their weight behind Japan's effort to interrupt the yen's surge. Indian stocks were an exception, declining on worries about further interest-rate increases and political concerns after a leaked U.S. diplomatic cable suggested the bribes were used to win a crucial vote in Parliament. In Tokyo, the Nikkei Stock Average ended at 9206.75, up 2.7% for the day but still down more than 10% for the week. The day's rally came after the Group of Seven industrialized nations of which Japan is a member said they would intervene in foreign exchange markets in a concerted effort to prevent excess volatility and disorderly movements. Among the big stock movers, Taiheiyo Cement Corp. climbed 15%, JFE Holdings Inc. added 3.6%, Toshiba Corp. rose 7.5% and Fast Retailing Co. jumped 6.4%. Sony Corp. rose 0.2%, underperforming the market after saying six of its Japanese manufacturing plants remain closed and that it is investigating whether a disruption in component supply will impact its production. Some traders were circumspect about the Tokyo market's rise, noting the G-7 action had been anticipated and Japanese officials still have a massive recovery and rebuilding task on hand. Tokyo Electric Power Co., which operates the authorized plant, soared 19%, paring its weekly loss to 55.3%. Among the region's other major stocks markets, China's Shanghai Composite added 0.3% to 2906.89, Hong Kong's Hang Seng Index rose 0.1% to 22300.23, South Korea's Kospi gained 1.1% to 1981.13, Taiwan's Taiex climbed 1.4% to 8394.75 and India's Sensex fell 1.5% to 17878.81. Many energy stocks soared across the region, including in Tokyo, as crude-oil futures climbed after the United Nations Security Council approved a no-fly zone over Libya and authorized all necessary measures to protect civilians in the nation. Inpex Corp. and Japan Petroleum Exploration Co. climbed 6.8% and 7.4%, respectively in Tokyo. Shares of PetroChina Co. reversed early gains to end 1.3% lower in Hong Kong and 0.6% lower in Shanghai, on profit-taking a day after it reported higher than expected profit growth for 2010.
Base metals closed mostly higher on the London Metal Exchange Friday, supported by a stronger euro although fears of slowing demand from China, the world's top metals consumer, kept the exchange's flagship copper contract in negative territory. The People's Bank of China Friday lifted the ratio of deposits banks must set aside as reserves the third such tightening this year in a bid to curb the country's high inflation rate. LME three-month copper closed the day down at $9,510 a metric ton, 0.6% below Thursday's PM kerb close. Other metals, though, were lifted higher as the dollar weakened against the single currency. Stronger stock markets, which rose after a declaration of ceasefire in Libya and the G-7's intervention to stem the rise of the yen, also supported the industrial metals. Crude prices fell Friday after Libyan forces called a cease-fire, but reports of renewed fighting on the ground and the mobilization of Western forces raised doubts that the conflict will end anytime soon. Light, sweet crude for April delivery settled down 35 cents, or 0.4%, at $101.07 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled down 97 cents, or 0.8%, to $113.93 a barrel. Investor demand for a safe haven lifted gold prices as worries about Japan and the Group of Seven's attempts to weaken the yen outweighed the calming influence of a ceasefire in Libya. The most actively traded contract, for April delivery, gained $11.90, or 0.9%, to settle at $1,416.10 a troy ounce on the Comex division of the New York Mercantile Exchange. The thinly traded March-delivery contract ended up 0.9%, or $11.90, at $1,415.90 a troy ounce.