Wall St ends higher; indexes up for second straight week

NEW YORK (REUTERS) - United States (US) stocks closed higher on Friday, with major indexes notching a second straight week of gains as investors were once again willing to overlook some soft economic data stemming from bad weather.

Gains were broad, with the Nasdaq closing at its highest level since 2000 and nine of the 10 major S&P 500 sector indexes rising on the day. The only declining sector was telecom, which is viewed as a defensive play. Energy, which is closely tied to the pace of economic growth, was the day's biggest advancer, up 1.5 per cent.

US export prices rose 0.2 per cent in January, the third straight monthly increase in a potentially positive sign for global economic demand and the outlook for American manufacturers.

In the latest data point affected by harsh winter weather, factory production fell 0.8 per cent in January, the biggest drop in more than 4 and 1/2 years. Investors have been willing to forgive soft data of late, attributing weak results to bad weather as opposed to a slowing economy.

"While weather is often used as an excuse to get a more favourable slant on things, half the country has felt a real impact, which is enough that equity markets can look at the data and not worry about it," said Mr Jeff Morris, head of US equities at Standard Life Investments in Boston.

Despite difficult weather, the preliminary reading of the Thomson Reuters/University of Michigan overall index of consumer sentiment stood at 81.2 in February, unchanged from the final January reading.

The Dow Jones industrial average was up 126.86 points, or 0.79 per cent, at 16,154.45. The Standard & Poor's 500 Index was up 8.78 points, or 0.48 per cent, at 1,838.61.

The Nasdaq Composite Index was up 3.35 points, or 0.08 per cent, at 4,244.03.

For the week, both the Dow and S&P 500 rose 2.3 per cent while the Nasdaq added 2.9 per cent. This is the second straight week of gains for all three. The benchmark S&P 500 now stands just 0.5 per cent away from its all-time closing high.

With the market within striking distance of record highs, investors have been looking for evidence that the market's valuation is justified.

"The market isn't particularly expensive, but neither does it strike me as being especially cheap," said Mr Morris, who helps oversee US$292 billion (S$370 billion) in assets. "It will be a tough slog for the market to move meaningfully higher from here."

Men's clothing retailer Jos. A. Bank Clothiers Inc said it would buy outdoor wear specialist Eddie Bauer for US$825 million from private equity firm Golden Gate Capital, spurning any merger considerations with rival Men's Wearhouse Inc.

Jos. A. Bank shares rose 0.4 per cent to US$55.12 while Men's Wearhouse stock slumped 5.3 per cent to US$44.07.

Insurer American International Group on Thursday raised its dividend and announced more share buybacks as its fourth-quarter earnings beat expectations. AIG's stock fell 1.2 per cent to US$48.98.

Weight Watchers International Inc plunged 28 per cent to US$22.10 after it forecast a full-year adjusted profit far slimmer than estimates.

Cliffs Natural Resources rose 5.8 per cent to US$23.16 as the best performer in the S&P 500. Much better-than-expected earnings were helped by a drop in costs and higher iron ore prices.

GNC Holdings Inc tumbled 14.6 per cent to US$44.72. The health supplements retailer posted weaker-than-expected quarterly results.

VF Corp declined 5.1 per cent to US$56.85 after the apparel company reported fourth-quarter earnings and issued its 2014 outlook.

With 398 S&P 500 companies having posted results so far, 66.3 per cent have reported earnings that beat expectations, above the historical average of 63 per cent, according to Thomson Reuters data. More than 64 per cent have topped estimates on revenue, above the long-term average of 61 per cent.

LCA-Vision Inc jumped 28 per cent to US$5.44 after the laser vision correction services company agreed to be acquired by skin health company PhotoMedex Inc for about US$106 million. PhotoMedex rose 1.3 per cent to US$14.

About 64 per cent of stocks traded on the New York Stock Exchange closed higher while 50 per cent of Nasdaq-listed shares closed in positive territory. About 5.1 billion shares traded on all US platforms, according to BATS exchange data.

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