New York: US stocks posted slight gains Friday after China took more steps to curb inflation, which traders fear could slow down the country’s growth.
China ordered its banks to hold more reserves, the second time it has done so in the past two weeks. The goal is to curb lending and avoid speculative bubbles. Inflation in China shot up to a more than two-year high last month. Investors also expect China to raise key interest rates as part of its effort to control inflation.
“As long as the Chinese government takes more restrictive actions, that’s going to be somewhat of a roadblock for equities,” said Alan Gayle, a senior investment strategist at RidgeWorth Investments.
The Dow Jones industrial average rose 22.32 points, or 0.2%, to 11,203.55.
The broader Standard & Poor’s 500 index rose 3.04 points, or 0.3%, to 1,199.73. The technology-focused Nasdaq composite index rose 3.72 points, or 0.2%, to 2,518.12. The Nasdaq, which lost less than 0.1%, was the only major index to finish the week with a loss. The Dow and S&P 500 eked out weekly gains of less than 0.1%.
Eight of the 10 industry groups that make up the S&P 500 index rose. Materials companies posted the largest gains with a 0.7% rise. Utilities and financial companies fell.
Hewlett-Packard Co. rose 1.9% to lead the 30 stocks that make up the Dow. Boeing Co. was the laggard in the Dow with a decline of 1.0%.
The euro rose 0.3% to $1.36 against the dollar amid signs that Ireland was closer to agreeing to a bailout. Ireland’s finances have been decimated after it nationalized three of its six banks following the collapse of a real estate boom.
Treasury prices were mixed. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.87% from 2.90% late Thursday.
The yield on the 10-year note is used as a benchmark to set interest rates for mortgages and other loans. Earlier this month, the US Federal Reserve announced a plan to buy $600 billion in Treasurys to drive interest rates lower in an effort to encourage spending and lending.
Fed chairman Ben Bernanke defended the program in a speech Friday from critics who said the move would devalue the dollar and give American companies an advantage in global trade.