Stocks finished out the week with gains of more than two percent for the Dow and S&P 500, and more than three percent for the Nasdaq. Bobbi Rebell reports.
Stocks gave back some gains after Fed chair Janet Yellen spoke at Harvard University. She said the central bank should hike rates "in the coming months" if the economy keeps pumping out jobs and growth picks up. Investors got more positive economic data. First quarter GDP growth was revised slightly higher to 0.8 percent. Consumer sentiment rose sharply in May. For the week, stocks made huge gains as investors got more comfortable with the likelihood of an interest rate hike this summer. Big Lots rocketed higher Friday after the discount retailer's same-store sales rose for the ninth straight quarter. Off-price retailers and consumer discretionary stocks will do well in a slow-growth environment, says David Schiegoleit of U.S. Bank's Private Client Reserve. (SOUNDBITE) DAVID SCHIEGOLEIT, MANAGING DIRECTOR OF INVESTMENTS, PRIVATE CLIENT RESERVE OF U.S. BANK, (ENGLISH) SAYING: "We really favor the consumer discretionary portions of the market that can benefit from a slow growth environment as opposed to a rapid growth environment." Auto stocks mixed amid a widened recall. Eight auto makers are recalling more than 12 million vehicles in the U.S. that have defective Takata air bag inflators. GameStop's shares dropped. The world's largest video game retailer issued a weak earnings outlook for the current quarter, citing a lack big game launches. Verizon's stock rose after the wireless carrier reached a tentative deal with unions to end a month-long strike. Valeant Pharmaceuticals's stock soared after Reuters reported it had received a takeover offer from Takeda Pharmaceutical and TPG Capital Management this spring. But the Canadian drug maker said no. In Europe, stocks made slight gains, propped up by drugmakers' shares.