Stocks have moved sharply higher over the course of the trading day on Friday, regaining some ground after trending lower in recent sessions. The markets have benefited from a positive reaction Chinese economic data as well as JP Morgan's (JPM) quarterly results.
The major averages have seen some further upside in recent trading, reaching new highs for the session. The Dow is up 178.77 points or 1.4 percent at 12,752.04, the Nasdaq is up 32.96 points or 1.2 percent at 2,899.15 and the S&P 500 is up 17.95 points or 1.3 percent at 1,352.71.
The rally on Wall Street, which comes after the Dow closed lower in each of the six previous sessions, is partly due to a positive reaction to a report on Chinese economic growth in the second quarter.
While the report showed that Chinese GDP increased at its slowest annual rate in over three years, the rate of growth was not as slow as some had feared. The report also showed that Chinese GDP increased by 1.8 percent compared to the previous quarter, exceeding economist estimates.
Traders have also reacted positively to quarterly results from financial giant JP Morgan, which reported better than expected second quarter earnings despite a massive trading loss.
JP Morgan said that the trading loss grew to $4.4 billion from its initial estimate of $2 billion but noted that its Chief Investment Office will no longer trade a synthetic credit portfolio. Shares of JP Morgan have risen by 5.5 percent on the news.
Shares of Wells Fargo (WFC) are also moving notably higher after the company reported second quarter earnings that rose year-over-year and came in above analyst estimates.
Meanwhile, traders have largely shrugged off a report from Thomson Reuters and the University of Michigan that unexpectedly showed a continued deterioration in consumer sentiment in July.
The report showed that the consumer sentiment index fell to 72.0 in July from the final June reading of 73.2. Economists had been expecting the index to edge up to 73.5.
The Labor Department released a separate report before the start of trading showing that U.S. producer prices unexpectedly saw a modest rebound in the month of June.
The Labor Department said its producer price index edged up by 0.1 percent in June after tumbling by 1.0 percent in May. The modest increase surprised economists, who had expected prices to see further downside and fall by about 0.4 percent.
Excluding a continued drop in energy prices and an increase in food prices, the core producer index rose by 0.2 percent in June. The increase matched the core price growth seen in each of the three previous months and came in line with economist estimates.
With JP Morgan and Wells Fargo helping to lead the way higher, banking stocks are seeing considerable strength in mid-day trading. Reflecting the strength in the banking sector, the KBW Bank Index has surged up by 2.5 percent.
Among banking stocks, SunTrust (STI) and Citigroup (C) are also posting notable gains, with both stocks advancing by 3.5 percent.
Significant strength has also emerged among housing stocks, as reflected by the 2.6 percent gain being posted by the Philadelphia Housing Sector Index. Hovnanian Enterprises (HOV) is turning in one of the housing sector's best performances, jumping by 8.5 percent.
The gain by Hovnanian comes after the company announced a land banking arrangement with the credit arm of Blackstone (BX) for up to $125 million. Blackstone's credit arm also agreed to increase their equity stake in Hovnanian.
Trucking stocks have also moved sharply higher over the course of the trading day, driving the Dow Jones Trucking Index up by 2.2 percent. Telecom, defense, health insurance, and chemical stocks are also posting strong gains amid broad based buying interest.
In overseas trading, stock markets across the Asia-Pacific region moved modestly higher on Friday, benefiting from a positive reaction to the Chinese GDP data. Japan's Nikkei 225 Index edged up by 0.1 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.
The major European markets showed stronger moves to the upside on the day. While the U.K.'s FTSE 100 Index advanced by 1 percent, the French CAC 40 Index surged up by 1.5 percent and the German DAX Index jumped 2.2 percent.
In the bond market, treasuries are giving back some ground after trending higher in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.5 basis points at 1.494 percent.
by RTT Staff Writer
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