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Stocks turn higher on Wall Street after report shows businesses are quickly restocking shelves
Stocks rose on Friday after the government said businesses are restocking their shelves faster than analysts had expected, putting the market on track for its biggest weekly gain of the year.
After declining almost 63 points in the morning, the Dow Jones industrial average was up 76 points in afternoon trading, at 12,537. It's now up almost 3.5 percent for the week.
Friday's turnaround came after the Commerce Department said U.S. wholesale stockpiles grew 0.6 percent in April. That's twice as fast as their March growth and a sign that businesses are ordering the goods that should lead to increased factory production and sales. Investors had been braced for more sluggish growth.
Wal-Mart Stores was the biggest gainer in the Dow, up $2.09, or 3.3 percent, at $67.96. Other companies that depend heavily on a strong economy grew too, including Intel Corp., up 46 cents, or 1.8 percent, at $26.41, and General Electric, up 21 cents, or 1.2 percent, to $19.21.
The Standard & Poor's 500 index rose almost nine points to 1,323, and the Nasdaq composite rose 23 points to 2,854. All three market indexes were up 3 percent or more for the week, their biggest gains of the year.
Nine out of ten industry groups in the S&P 500 rose. Only energy stocks declined, following energy prices lower.
Markets also fell in Asia. Shanghai's stock index lost a half-percent, the fifth day of losses. Japan's Nikkei fell 2.1 percent.
Chinese leaders have been showing signs of urgency ahead of May trade and industrial data due out this weekend that might be even weaker than earlier pessimistic forecasts. The Chinese government cut interest rates for the first time in four years and has reduced gasoline and diesel prices for the second time in a month.
Over the long run, that will put more money in the pockets of Chinese consumers. In the short run it's a sign that the government is worried about growth.
"That shows they're being proactive, but on the other hand, it also makes you wonder, what's the data is really like?" said Uri Landesman, president of Platinum Partners. "I'm wondering how bad the data's going to be. I'd be very surprised if it's good."
China is a key U.S. trade partner so its growth is important to U.S. companies. Its importance is magnified by the possibility that Europe's economy will go from slow growth to shrinkage, Landesman said.
Major European markets fell. France's benchmark index lost 1.3 percent, Britain's dropped 0.8 percent and Germany's fell 0.9 percent.
Facebook rose 94 cents, or 3.3 percent, to $27.25 after announcing an "app center" that will recommend new add-on software for users. Anything that boosts user interaction is likely to help it sell more ads, which has been a key concern for investors in its new stock, which debuted three weeks ago at $38.
Chesapeake Energy Corp. rose 47 cents, or 2.6 percent, to $18.32 after shareholder votes prompted the resignations of two directors at its annual meeting on Friday. Earlier in the day it had said it will sell pipeline assets in three separate deals for a total of more than $4 billion in cash.
Shares of truckmaker Navistar International Corp. rose $3.86, or 16 percent, to $27.97 after investor Carl Icahn boosted his stake.