Happy days are here again, according to global markets which had their best week since last December.
That was despite no let up in the flow of glum news from Japan, Libya and the other parts of the Middle East, plus the continuing uncertainty in Europe as Portugal staggers towards a bailout.
An Improvement in US 4th quarter economic growth saw the dollar rise on hopes (again) that US interest rates would start rising, a move that was extended after Federal Reserve officials said the central bank’s current bond-buying program is unlikely to be extended past its June cut-off date.
The government said the US economy grew more quickly than previously estimated in the fourth quarter of 2010 (up an annual 3.1% against 2.8% in the second estimate last month) as businesses restocked shelves to meet rising demand.
But US consumer sentiment in March fell to its lowest level in more than a year as petrol and food prices rose, according to the latest survey from Thomson Reuters and the University of Michigan.
The Australian dollar advanced too, hitting a high of $US1.0294c, the highest it has been since the float in 1983.
The Dow added 50.03 points, or 0.41%, to 12,220.59; the Standard & Poor’s 500 Index rose 4.14 points, or 0.32%, to 1,313.80 and the Nasdaq Composite Index added 6.64 points, or 0.24%, to 2,743.06.
For the week, the Dow gained 3.1%, the S&P climbed 2.7% and the Nasdaq advanced 3.8%.
Australian shares are poised to open slightly lower when trading resumes today.
The SPI futures index was down 8 points at 4765.
That was after Australian stocks had their best week since early November last week.
At the market close, the benchmark ASX200 index was 43 points, or 0.91%, higher at 4742.6, while the All Ordinaries index rose 46.1 points, or 0.96%, to 4840.3.
For the week, the ASX200 is up about 2.2%. The index was also up for a sixth day in a row.
The US dollar rallied after several top Federal Reserve officials said the US central bank is unlikely to extend its bond-buying stimulus program beyond a planned $US600 billion.
Philadelphia Fed Bank President Charles Plosser also said the Federal Reserve will have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation, changing the outlook for benchmark interest rates.
European leaders reached agreement on new anti-crisis measures at a summit but details were not settled and the leaders were forced to delay increasing their rescue fund until several disputes are resolved.
The situation in Portugal added to the sense that the much heralded agreement on bailouts and stabilisation were still a work in progress and a long way from resolution.
The crisis could force Portugal to ask for a bailout from the European Union and International Monetary Fund.
Portuguese bond yields hit new highs after Standard & Poor’s downgraded the country’s debt ratings and warned it could cut them again.
Spain’s Prime Minister Jose Luis Rodriguez Zapatero said he did not fear any spillover from the political uncertainty in Portugal.
Despite this, European shares closed slightly higher on stronger signs on the economy and corporate results.
The Stoxx Europe 600 Index rose 3.1% last week, the biggest weekly gain since last September.
The index had fallen for four consecutive weeks on concerns about the situation in the Middle East and North Africa, rising oil prices and then the triple tragedies in Japan.
In Asia Japan’s Nikkei index stood out, ending 1.1% higher on Friday to end its best week since last November, a big turnaround from the previous week.
The index rose 3.6% for the week, but is still down 8% since before March 11 when the quake and tsunami hit.
The MSCI Asia Pacific Index rose 4.06% last week, the best since the first week of last November.
South Korea’s Kospi Index climbed 3.7%, Australia was higher and Hong Kong’s Hang Seng Index was up nearly 4%.
