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Stocks Moving Mostly Higher In Early Trading - U.S. Commentary

After moving mostly lower over the course of the previous session, stocks have moved back to the upside in early trading on Friday. The major averages have all climbed into positive territory, although buying interest seems somewhat subdued.

The major averages have pulled back off their highs for the young session in recent trading but remain in positive territory. The Dow is up 72.96 points or 0.6 percent at 13,037.06, the Nasdaq is up 10.01 points or 0.3 percent at 3,017.57 and the S&P 500 is up 5.43 points or 0.4 percent at 1,382.35.

The early strength on Wall Street is largely due to a positive reaction to quarterly results from big-name companies such as Microsoft (MSFT), General Electric (GE), and McDonald's (MCD).

After the close of trading on Thursday, Microsoft reported fiscal third quarter earnings of $0.60 per share, better than the consensus estimate of $0.58 per share. Revenues rose 6 percent to $17.4 billion, exceeding the $17.2 billion consensus estimate.

While GE reported first quarter net earnings that fell year-over-year, the diversified conglomerate reported adjusted earnings of $0.34 per share, a penny above analyst estimates. Revenues fell 8 percent year-over-year to $35.2 billion but also came in above expectations.

Fast food giant McDonald's reported first quarter earnings that rose to $1.23 per share from $1.15 per share in the year-ago quarter, in line with estimates. The company also reported sales growth that matched the expectations of economists.

Honeywell (HON), Advanced Micro Devices (AMD), and Capital One Financial (COF) are among the other well-known companies that reported better than expected quarterly results.

The upbeat earnings news has generated some positive sentiment, although trading activity is relatively subdued amid a lack of major U.S. economic data and lingering uncertainty about the financial situation in Europe.

Nonetheless, software stocks are seeing considerable strength on the heels of the news from Microsoft, with the Dow Jones Software Index up by 2 percent. Shares of Microsoft have jumped by 4.5 percent.

Considerable strength is also visible among oil service stocks, as reflected by the 1.8 percent gain being posted by the the Philadelphia Oil Service Index. Schlumberger (SLB) is helping to lead the sector higher after reporting strong first quarter earnings growth.

Meanwhile, semiconductor stocks are seeing early weakness, with SanDisk (SNDK) and Altera (ALTR) posting notable losses after reporting disappointing first quarter results.

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Friday. While Japan's Nikkei 225 Index ended the day down by 0.3 percent, Hong Kong's Hang Seng Index edged up by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. The German DAX Index is up by 1 percent, while the U.K.'s FTSE 100 Index is up by 0.4 percent and the French CAC 40 Index is up by 0.1 percent.

In the bond market, treasuries are giving back some ground after moving higher in the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 3.7 basis points at 1.989 percent.

by RTT Staff Writer

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