Shares end the turbulent week with a rally
A new group of bank revenues and economic data on Friday morning increased investors’ optimism about the state of the economy and reduced concerns that the Federal Reserve could raise interest rates by a full percentage point at the meeting later this month.
All the big averages ended the week in red. The Dow index fell 0.2 percent. S&P and Nasdaq fell 0.9% and 1[ads1].6%, respectively.
Consumption spending accounts for about two-thirds of the US economy. Given Friday’s good reports, the US economy may have grown in the second quarter, avoiding two consecutive quarters of a shrinking economy – a scenario some economists call a technical recession – noted Jeffrey Roach, chief economist at LPL Financial.
The new figures and bank revenues helped allay fears of a full percentage point increase from the Fed. Only 31% of investors price in an increase of 100 basis points from Friday, compared to over 80% earlier this week, according to CME Fedwatch Tool.
