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While you were sleeping: Manufacturing advances

Friday 2nd April 2010

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Signs of continued economic expansion and positive sentiment from China through Europe and into the U.S. bolstered investors ahead of the Easter holiday weekend.

The Dow Jones Industrial Average rose 0.65% to close the week at 10,927.07, while the Standard & Poor’s 500 gained 0.74% to 1178.10. The Nasdaq Composite dipped 0.19% to 2402.58.

During the session, the Dow edged closer to 11,000, climbing as high intraday as 10,956.36 - its highest level since late September 2008. The S&P 500 hit an intraday high at 1181.43, also its highest level since late September 2008.

For the week, the Dow gained 0.7%; the S&P 500 rose 1%, and the Nasdaq edged up 0.3%.

The Chicago Board Options Exchange Volatility Index, or VIX, which is known as Wall Street’s ‘fear gauge’ slid 0.68% to 17.47.

Among the most active were Alcoa Inc, Freeport-McMoRan Copper & Gold Inc, Ford Motor Co, Exxon Mobil and JPMorgan Chase & Co.

U.S. shares got a boost from reports showing that the manufacturing sector was regaining strength and the labour market was healing.

“This economy in our view is bouncing back much stronger than most people expect,” Ryan Detrick, senior technical analyst at Schaeffer's Investment Research in Cincinnati, told Reuters.

Tomorrow the U.S. government will release its March jobs report - though U.S. markets will be closed. Wall Street returns to work on Monday.

In Europe overnight, the Dow Jones Stoxx 600 powered ahead by 1.5% to 267.62, ending up for a fifth straight week.

Investors there were also enthused by economic reports. Chinese manufacturing expanded for a 13th month, business sentiment rose in Japan and factories in Britain and the euro region accelerated output.

The U.K.’s FTSE 100 advanced 1.15%, Germany’s DAX ended up 1.33% and France’s CAC 40 surged 1.52%.

Some of the biggest movers were BHP Billiton, Ryanair Holdings Plc, BMW and Clariant AG.

The Dollar Index, which measures the greenback against a basket of six major currencies, shed 0.36% to 80.78.

The U.S. dollar rose as high as 93.89 yen, its best level since August 2009. It was last at 93.86 yen, up 0.43% on the day.

The weakening of the yen was also spurred by talk that Japanese investors will look for higher returns abroad now that the new fiscal year has started, Reuters reported.

Bank of Japan policy makers will consider raising their economic assessment next week after mounting evidence that the export-led recovery exceeds their expectations, three people familiar with the matter told Bloomberg News.

As for the euro, it erased early losses and gained 0.45% against the dollar to US$1.3571. It also jumped to a session high of 1.441 against the Swiss franc.

The Reuters/Jefferies CRB Index, which tracks 19 raw materials, jumped 1.13% to 276.43.

Copper rose to a 20-month high as improving demand sentiment combined with fund buying helped push prices up, while nickel hit a near two-year high at US$25,320.

Oil pushed to a near 18-month high, bolstered by talk of fresh inflows from investors at the start of the new quarter. U.S. crude for May delivery last traded with gains or more than 1%, at US$84.90 a barrel.

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