Stocks set for fifth week of gains with the help of central bankers

Efforts to stimulate economic growth boosts investor sentiment; S&P up 11% this year

Nov 21, 2014 @ 12:01 am

By Bloomberg News

U.S. stock-index futures rose, with the S&P 500 poised for a fifth week of gains, amid optimism central banks around the world will do what it takes to support the global economy.

Ross Stores Inc. advanced 4.8% in early New York trading after raising its full-year earnings forecast. Habit Restaurants Inc. gained 7.4% after the burger chain surged 120% on its first day of trading Thursday.

Futures on the S&P 500 expiring in December rose 0.5% to 2,063.1 at 10:33 a.m. in London. The S&P 500 has advanced 0.6% this week, pushing its gains in 2014 to 11%. Dow Jones Industrial Average contracts added 100 points, or 0.6%, to 17,794 Friday. Both benchmark gauges rose to all-time highs Thursday after data showed improvement in the U.S. economy.

“Investors and markets are always looking for any hint of future policy changes,” Darren Hepworth, the Leeds, U.K.-based global trading director at TD Direct Investing (Europe) Ltd., said by email. “High-level central bank action is a significant focus for the markets, particularly interest rate changes and methods used to stimulate growth, such as quantitative easing, which impact every type of investor.”

European Central Bank president Mario Draghi said he will do what is necessary to raise inflation in the region as fast as possible. Should the current policy not be effective, the ECB will “broaden even more the channels” through which it intervenes, by adjusting the size, pace and composition of asset purchases, he said in Frankfurt.

CHINA INJECTION

Global equities also gained after the People's Bank of China supplied 50 billion yuan ($8.16 billion) of short-term funds as upcoming share offers crimped cash supply. China's central bank said Friday it will provide liquidity support through multiple monetary policy tools when necessary.

Concern that economic recoveries from the U.S. to Europe and Japan are failing to spur inflation has been cited by central bankers worldwide as justification for prolonged stimulus efforts.

Ross Stores advanced 4.8% to $87.23 after forecasting full-year earnings of as much as $4.32 a share, up from a maximum of $4.26 a share. That topped the average analyst projection of $4.25. The retail chain also posted third-quarter earnings and sales that beat analysts' estimates.

Habit Restaurants gained 7.4% to $42.45. The Irvine, Calif.-based company sold 5 million shares at $18 each Nov. 19. Shares surged 120% to $39.54 Thursday.

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