U.S. Stocks Post Biggest Weekly Gain Since August; Boeing Rises (Michael Patterson)

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By Michael Patterson

Feb. 3 (Bloomberg) -- U.S. stocks posted their biggest weekly advance since August, as optimism that consumer spending will drive economic and profit growth without fueling inflation sent the Standard & Poor's 500 Index to a six-year high.

Earnings from Boeing Co. that exceeded analysts' estimates helped the Dow Jones Industrial Average cap its longest monthly winning streak since 1995 and post its fifth record of 2007. Energy shares led the S&P 500's rally as Exxon Mobil Corp. and Valero Energy Corp.'s profit topped expectations and oil prices climbed to the highest this year.

The Federal Reserve on Jan. 31 left interest rates unchanged and said the economy is picking up while the pace of price increases has slowed. Government reports that showed consumer spending propelled economic growth last quarter while inflation gauges rose at a slower pace confirmed the predictions of policy makers including Fed Chairman Ben S. Bernanke.

``The economy is indeed on a nice expansionary path that's non-inflationary. It's perfect from the Fed's point of view,'' said John Kattar, who helps oversee $1.8 billion as chief investment officer at Eastern Investment Advisors in Boston. ``It's good news for stocks.''