By Saumya Vaishampayan
U.S. stocks opened higher Friday on the first trading day of
2015.
Investors said they couldn't attribute the premarket gains to
any particular news, but they noted the rise could be a bounce-back
from the decline in stocks on Wednesday. The stock market was
closed Thursday for the New Year's holiday.
The Dow Jones Industrial Average Advanced 110 points, or 0.6%,
to 17934. The S&P 500 index gained 12 points, or 0.6%, to 2071,
and the Nasdaq Composite Index rose 39 points, or 0.8%, to
4775.
While stocks pulled back in the final trading day of 2014, the
major indexes posted gains for the year. The Dow industrials rose
7.5% to end at 17823.07 in 2014, notching its sixth-straight annual
gain. The S&P 500 advanced 11.4% in 2014 to end at 2058.90,
gaining for the third year in a row.
Many market participants say the backdrop for U.S. stocks
remains positive. A continued economic recovery should brighten the
outlook for corporate profits. The 46% slide in crude-oil prices in
2014 should put more money in the pockets of consumers, which could
spur spending and boost economic and corporate-profit outlooks.
"The continued expansion in the U.S. economy...means increased
revenue and earnings," said Robert Pavlik, chief market strategist
at Banyan Partners, adding that interest rates and inflation remain
low. "All these [factors] are combining to give a very positive
feeling" for stocks, he said.
While the Federal Reserve is likely to lift short-term interest
rates in 2015, Mr. Pavlik said he isn't concerned about that
denting further gains in stocks.
"The Federal Reserve is not going to move on interest rates
unless the economy is getting to a point where it can sustain an
increased interest rate," he said.
On Friday, investors paid attention to comments from Mario
Draghi, president of the European Central Bank. Mr. Draghi told the
German daily Handelsblatt in an interview published Friday that
interest rates in the currency bloc are set to stay lower for
longer.
He said risks surrounding the central bank's ability to fulfill
its price stability mandate have increased over the past six months
and noted that medium-term inflation expectations have fallen since
June.
His comments boosted the U.S. dollar against several currencies.
The ICE U.S. dollar index surged to 90.82, its highest level since
March 2006. The euro fell to $1.2039, marking its lowest level
since 2010.
Also attracting attention was data showing activity in the
eurozone's manufacturing sector in December expanded at a slower
pace than previously estimated. The Stoxx Europe 600 fell 0.3%.
In commodity markets, crude-oil futures declined 1.8% to $52.31
a barrel.
Demand for assets considered safe havens declined. The yield on
the 10-year Treasury note rose to 2.196%. Yields rise as prices
fall. Gold futures fell 0.6% to $1177.40 an ounce.
In corporate news, Linn Energy LLC said it cut its oil and
natural-gas budget by 53% to $730 million for the new year, the
latest energy company to reduce its drilling budget amid the slide
in oil prices.
-Josie Cox contributed to this article.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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