NEW YORK (Reuters) - Wall Street on Friday closed higher for the first time in a week, lifted by rising tech stocks, while oil prices slumped 5 percent on receding fears about Middle East fighting disrupting supplies.
U.S. Treasury debt prices jumped on government data indicating U.S. economic growth was slowing and the dollar was down, while gold had its first losing day after a seven-session rally.
The major U.S. stock indexes snapped a four-day losing streak after the Wall Street Journal reported chipmaker Intel Corp (INTC.O) is in talks to buy rival Altera Corp ALTR.O. Chipmakers bounced, led by a 28 percent gain in Altera.
“We’ve seen a lot of M&A news recently and it’s helping the market,” said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. “There is definitely an M&A cycle going on, so that is a good thing.”
For the week, however, the Dow lost 2.3 percent, the S&P 500 declined 2.2 percent, and the Nasdaq was off 2.7 percent.
Oil investors’ worries diminished about the conflict in Yemen, which is close to a major chokepoint for oil tankers, and focused on new supplies possibly coming to market after any Iranian nuclear deal.
U.S. crude CLc1 closed off 5 percent at $48.87 a barrel while Brent LCOc1 ended down 4.7 percent at $56.41. [O/R]
But oil prices still notched their second straight weekly gain, boosted by the dollar’s recent weakness after a year-long rally.
Late in the trading day Federal Reserve Chair Janet Yellen told an audience in San Francisco an interest rate hike may be warranted later this year although a downturn in core inflation or wage growth could force Fed policymakers to hold off.
The Dow Jones industrial average .DJI closed up 34.43 points, or 0.19 percent, to 17,712.66, the S&P 500 .SPX added 4.87 points, or 0.24 percent, to 2,061.02 and the Nasdaq Composite .IXIC gained 27.86 points, or 0.57 percent, to 4,891.22.
Treasury yields fell on U.S. gross domestic product data which signalled slow fourth-quarter growth and reinforced opinions the Fed would push back the launch of its first rate hikes since 2006.
Investors covering short positions along with month-end demand also helped push Treasury yields lower.
Benchmark 10-year notes US10YT=RR were last up 15/32 in price to yield 1.95 percent, down from 2.00 percent late on Thursday.
The dollar index .DXY, which tracks the greenback versus a basket of six currencies, edged down 0.05 percent to 97.383. The yen JPY= was last up 0.01 percent against the dollar at 119.17 yen and the euro EUR= was at $1.0899, up 0.15 percent.
Gold fell, ending a seven-day rally on investor caution ahead of Yellen’s comments. Spot gold XAU= eased 0.5 percent to $1,198.30 an ounce.
Additional Reporting By Marc Jones, Jemima Kelly and Nigel Stephenson in London and Shinichi Saoshiro in Tokyo; Editing by Chizu Nomiyama, David Gregorio and James Dalgleish