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US stocks rise after G7 yen intervention
G-7 countries agreed on a coordinated currency intervention to support Japan's economy.
New York: US stocks rose on Friday after the Federal Reserve announced it will allow banks to boost or restart dividend payments this year and the Group of Seven (G-7) backed a plan to bring the Japanese yen down from post-war highs, Xinhua reported.
Officials from the G-7 countries agreed on a coordinated currency intervention to support Japan's economy after last Friday's magnitude 9 earthquake. This is first time G7 countries have intervened in currency markets since 2000.
The market was also boosted by banking shares. The Federal Reserve said on Friday it will allow some of the largest US banks to boost or restart dividend payments this year.
Investors were cheered by this announcement and banking shares were among the best performers on Friday.
Friday was also the day when stock index futures, stock index options, single stock options and single stock futures all expired.
During the trading week, US stocks were seriously impacted by the events in Japan. The Standard & Poor's 500 Index and the NASDAQ erased their gains for the year Wednesday, when all three major indexes ended at their lowest levels of 2011.
After the big sell-off, US stocks rebounded on Thursday and closed higher in the last trading day of the week, thanks to the positive economic reports during the week.
Investors believed the economic reports suggested a strong economic recovery trend. The Labour Department said on Thursday the initial claims for state unemployment benefits fell by 16,000 to a seasonally adjusted 385,000.
Meanwhile, the Philadelphia Federal Reserve Bank said on Thursday that manufacturing activity in the mid-Atlantic region increased for the fourth consecutive month in March.
Apart from Japan's situation, investors also worried that the unrest in Libya could add to uncertainty in the market.
The Dow Jones industrial average advanced 83.93 points, or 0.71 per cent, to 11,858.52. The Standard & Poor's 500 Index gained 5.49 points, or 0.43 per cent, to 1,279.21. The NASDAQ increased 7.62 points, or 0.29 per cent, to 2,643.67.
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