Dow ends best 6 weeks since 1938 on economic hopes

US stocks rose on April 17, with the Dow scoring its biggest six-week gain since July 1938, helped by a reassuring report on the mood of consumers and stabilization in General Electric and Citigroup's quarterly results.

The Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938.April 17's close also marked the S&P 500's longest weekly winning streak since 2007.

The Reuters/University of Michigan survey showed that U.S. consumers have more confidence in the economy than they have had since the sudden collapse of Lehman Brothers in September, the latest in a spate of data suggesting the economic slump may be easing.

GE and Citigroup both posted better-than-expected results, lifting the broader market, and bank stocks rallied as investors bet other financial companies could follow up with more news showing the sector is on the mend.

Among banks, shares of Bank of America, due to post quarterly results on Monday, climbed 2.5 percent to $10.60. The KBW Bank index climbed 3.4 percent and has come close to more than doubling since its March lows. GE shares gained almost 1 percent to US$12.39. "The rate of deceleration in the economy is slowing," said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore. "From a macro standpoint, the reason for a lot of the drive is just that we're continuing to get data points that show things are beginning to operate very well in the credit markets.
"The Dow Jones industrial average rose 5.90 points, or 0.07 percent, to 8,131.33. The Standard & Poor's 500 Index climbed 4.30 points, or 0.50 percent, to 869.60. The Nasdaq Composite Index added 2.63 points, or 0.16 percent, to 1,673.07.The surge capped the S&P 500's longest weekly winning streak since spring 2007 and added to its strong recovery since the stock market's descent to 12-year closing lows early last month.

For the week, the Dow rose 0.6 percent, the S&P 500 advanced 1.5 percent and the Nasdaq gained 1.2 percent. The benchmark S&P 500 is now up 28.5 percent since the bear market closing low of March 9. Its year-to-date drop has narrowed to about 4 percent.

On Nasdaq, a 1.6 percent gain in the shares of Apple, the maker of the iPhone and iPod, underpinned the technology sector's advance ahead of Apple's quarterly results next week.

"Apple is probably going to have positive things to say," added Lutz. Apple's stock closed at US$123.42, while Google gained 0.9 percent to US$392.24, a day after posting a stronger-than-expected quarterly profit. Also underpinning the market's advance were the gains in the shares of companies seen better able to withstand economic downturns. Shares of fast-food company McDonald's Corp rose 2.5 percent to US$56.09 after its chief executive told CNBC that he saw "some thawing" in economic conditions.

The stock gave the top boost to the Dow.Deutsche Bank said Procter & Gamble, Colgate-Palmolive and Kimberly-Clark Corp were undervalued at current levels. P&G rose 2.4 percent to US$51.66, making it the Dow's second-biggest advancer, while shares of diversified health-care company Johnson & Johnson added 1.6 percent to US$53.05. Profit-taking ahead of the weekend, however, tempered some of the upside, according to traders.

Citigroup reported a smaller-than-expected first-quarter loss, but its shares dropped almost 9 percent to US$3.65 as some investors paused following the stock's strong run-up since early last month when the bank said, along with others, it had had a good start to 2009.