After initially seeing modest strength, stocks moved steadily higher throughout much of the trading day on Friday. The markets continued to benefit from optimism about the likelihood of further stimulus measures from the world's central banks.
The major averages saw further upside going into the close, ending the session near their best levels of the day. The Dow climbed 115.26 points or 0.9 percent to 12,767.17, the Nasdaq jumped 36.47 points or 1.3 percent to 2,872.80 and the S&P 500 surged up 13.74 points or 1 percent to 1,342.84.
With the gains on the day, the major averages all moved higher for the second straight week. The Nasdaq rose by 0.5 percent, while the Dow and the S&P 500 advanced by 1.7 percent and 1.3 percent, respectively.
The strong upward move seen over the course of the trading day came amid optimism that recent disappointing economic data and the lingering threats from Europe will lead the world's central banks to take additional steps to prop up the global economy.
Continued buying interest was generated by Thursday's report from Reuters indicating that central banks from major economies are prepared to take necessary steps to stabilize the financial markets after the Greek elections on Sunday.
"The central banks are preparing for coordinated action to provide liquidity," Reuters quoted a senior G20 aide familiar with discussions among international financial diplomats as saying.
Adding to the optimism, the U.K. government and the Bank of England announced additional measures to boost the credit and financial markets.
The measures will offer banks billions of pounds in cheap credit in an effort to stimulate lending while also providing access to short-term money to deal with "exceptional market stresses."
A disappointing batch of U.S. economic data also seemed to provide further evidence that the economy needs additional stimulus to avoid a double-dip recession.
The Federal Reserve released a report showing an unexpected drop in industrial production in May, while a separate report from Reuters and the University of Michigan showed a substantial deterioration in consumer sentiment in June.
The rally came despite continued uncertainty about the outcome of this weekend's elections in Greece, which will have a significant impact on whether the debt-plagued nation sticks to the terms of its international bailout.
Most of the major sectors moved to the upside over the course of the trading day, reflecting broad based buying interest on Wall Street.
Software stocks posted particularly strong gains, driving the Dow Jones Software Index up by 2.5 percent. Nuance Communications (NUAN) and Oracle (ORCL) turned in two of the software sector's best performances following analyst upgrades.
Considerable strength also emerged among steel stocks, as reflected by the 2.7 percent gain posted by the NYSE Arca Steel Index. ArcelorMittal (MT), Olympic Steel (ZEUS), and Schnitzer Steel (SCHN) posted notable gains.
Natural gas stocks also saw significant strength on the day, resulting in a 2.1 percent gain by the NYSE Arca Natural Gas Index. Electronic storage, chemical, oil service, and brokerage stocks also turned in particularly strong performances.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday, although Japan's Nikkei 225 Index closed only just above the unchanged line. Hong Kong's Hang Seng Index surged up by 2.3 percent, while Australia's All Ordinaries Index rose by 0.4 percent.
The major European markets also showed notable moves to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.2 percent, the German DAX Index and the French CAC 40 Index jumped 1.5 percent and 1.8 percent, respectively.
In the bond market, treasuries moved modestly higher over the course of the session despite the strength among stocks. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.4 basis points to 1.587 percent.
While the outcome of the Greek elections is likely to drive trading in the early part of next week, the focus will quickly shift to the Federal Reserve's monetary policy announcement on Wednesday.
Several key U.S. housing reports are also scheduled to be released next week, although they are likely to be overshadowed by any news from the Fed.
On the earnings front, Oracle, FedEx (FDX), Adobe Systems (ADBE), Bed Bath & Beyond (BBBY), and ConAgra Foods (CAG) are among the companies due to release their quarterly results next.
by RTT Staff Writer
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