By Hilary Russ
NEW YORK, July 13 (Reuters) – The benchmark S&P 500 hit a more than five-month high on Friday on gains in industrials and energy companies, while the safe-haven U.S. dollar flattened after touching a two-week high.
Gold slipped to seven-month lows and Treasury prices rose after the Federal Reserve reinforced views of strong U.S. economic growth in a report to Congress, reinforcing expectations of higher interest rates.
The Fed reiterated that it “expects that further gradual increases” in interest rates would be appropriate given “solid” growth.
An absence of rhetoric overnight about a U.S.-China trade war helped industrial stocks, as did remarks on Thursday from U.S. Treasury Secretary Steven Mnuchin, who said that the United States and China might reopen trade talks.
“Despite the ominous headlines about a trade war with China, we’re comfortable with U.S. equities at current prices amid favorable macro trends and surging earnings growth,” said Mike Bailey, director of Research at FBB Capital Partners in Maryland.
Gains from Boeing, Caterpillar and 3M helped offset a drop in financials after three big Wall Street banks reported mixed quarterly earnings.
The Dow Jones Industrial Average rose 104.19 points, or 0.42 percent, to 25,029.08, the S&P 500 gained 3.66 points, or 0.13 percent, to 2,801.95 and the Nasdaq Composite added 0.04 points, or 0 percent, to 7,823.96.
The pan-European FTSEurofirst 300 index rose 0.26 percent and MSCI’s gauge of stocks across the globe gained 0.24 percent.
The greenback initially got a boost from the Fed report and from data showing China’s trade surplus with the United States swelled to a record in June, which could further inflame a trade dispute between Shanghai and Washington.