After moving sharply lower over the course of the previous session, stocks showed a strong move back to the upside during trading on Friday. The markets benefited from bargain hunting but remained well off their recent highs.
The major averages pulled back off their highs going into the close but still ended the day firmly in positive territory. The Dow rose 67.21 points or 0.5 percent to 12,640.78, the Nasdaq jumped 33.33 points or 1.2 percent to 2,892.42 and the S&P 500 climbed 9.51 points or 0.7 percent to 1,335.02.
The rebound on Wall Street came as some traders looked to pick up stocks at reduced levels following the sell-off that was seen in the previous session.
Nonetheless, trading activity was somewhat subdued, as the economic concerns that contributed to the sharp pullback on Thursday continued to hang over the markets.
Uncertainty about the near-term outlook for the markets also kept some traders on the sidelines, while others looked to get a head start on the weekend amid record-breaking temperatures.
Traders also digested news that ratings agency Moody's downgraded the ratings of 15 banks and securities firms with global capital markets operations.
Moody's said all of the banks affected by the downgrades have significant exposure to the volatility and risks inherent in the capital markets business.
Financial giant Morgan Stanley (MS) was among the companies downgraded, although its long-term debt rating was lowered by just two notches compared to expectations for three.
Among individual stocks, shares of Ryder (R) tumbled 13 percent after the trucking and logistics company slashed its second quarter and full year earnings guidance due to lower than expected results in its Fleet Management Solutions business segment.
Electronic storage stocks showed a strong move to the upside over the course of the trading day, driving the NYSE Arca Disk Drive Index up by 2.8 percent. With the gain, the index partly offset the 4.2 percent loss it posted on Thursday.
Quantum (QTM) and STEC (STEC) turned in two of the storage sector's best performances, surging up by 5.9 percent and 5.6 percent, respectively.
Significant strength also emerged among biotechnology stocks, as reflected by the 2.2 percent gain posted by the NYSE Arca Biotechnology Index. Sequenom (SQNM) helped to lead the sector higher, while Life Technologies (LIFE) and Illumina (ILMN) also posted notable gains.
Natural gas, healthcare, banking, and semiconductor stocks also saw considerable strength after falling sharply on Thursday. Most of the other major sectors also moved to the upside.
In overseas trading, stock markets across the Asia-Pacific region came under pressure on Friday following the overnight sell-off on Wall Street. Japan's Nikkei 225 Index ended the day down by 0.3 percent, while Hong Kong's Hang Seng Index fell by 1.4 percent.
The major European markets also moved to the downside on the day. While the French CAC 40 Index slid by 0.8 percent, the U.K.'s FTSE 100 Index and the German DAX Index dropped by 1 percent and 1.3 percent, respectively.
In the bond market, treasuries moved notably lower, more than offsetting the modest strength that was seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5.4 basis points to 1.672 percent.
While developments overseas could drive trading next week, investors are also likely to keep an eye on U.S. reports on new home sales, durable goods orders, jobless claims, and personal income and spending.
Additionally, Nike (NKE), General Mills (GIS), H&R Block, (HRB) Walgreen (WAG), Lennar (LEN), Paychex (PAYX), and Family Dollar (FDO) are among the companies due to report their quarterly results next week.
by RTT Staff Writer
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