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Major Averages Climb To New Record Intraday Highs - U.S. Commentary


Following the strong upward move seen in the previous session, stocks are seeing further upside in morning trading on Friday. The continued advance has once again lifted the major averages to new record intraday highs.

Currently, the major averages are just off their highs of the session. The Dow is up 189.41 points or 0.7 percent at 25,764.14, the Nasdaq is up 33.91 points or 0.5 percent at 7,245.68 and the S&P 500 is up 14.56 points or 0.5 percent at 2,782.12.

The continued strength on Wall Street partly reflects optimism about the earnings season after financial giants JPMorgan Chase (JPM), BlackRock (BLK) and Wells Fargo (WFC) all reported better than expected quarterly results.

JPMorgan and BlackRock have moved notably higher after reporting results that beat estimates, although Wells Fargo has moved to the downside.

Traders are also digesting some closely watched economic data, including a report from the Commerce Department showing retail sales rose in line with economist estimates in the month of December.

The Commerce Department said retail sales increased by 0.4 percent in December after climbing by an upwardly revised 0.9 percent in November.

Economists had expected retail sales to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month.

Excluding auto sales, retail sales still rose by 0.4 percent in December after jumping by 1.3 percent in November. The increase in ex-auto sales also matched estimates.

A separate report from the Labor Department showed consumer prices rose by less than expected in December, reflecting a sharp pullback in energy prices.

The Labor Department said its consumer price index inched up by 0.1 percent in December after climbing by 0.4 in November. Economists had expected prices to rise by 0.2 percent.

Meanwhile, the report said core consumer prices, which exclude food and energy prices, increased by 0.3 percent in December after ticking up by 0.1 percent in November. Core prices had been expected to rise by 0.2 percent.

Retail stocks are extending a recent upward trend in morning trading, with the Dow Jones Retail Index jumping by 1.4 percent. The index is climbing to a record intraday high.

The strength in the sector comes following the retail sales data as well as a report from the National Retail Federation showing stronger than expected holiday sales growth.

Considerable strength is also visible among gold stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Gold Bugs Index. The strength in the sector comes amid an increase by the price of gold.

Software, airline, and pharmaceutical stocks are also seeing some strength on the day, while most of the other major sectors are showing more modest moves to the upside.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Friday. China's Shanghai Composite Index inched up by 0.1 percent, while Hong Kong's Hang Seng Index advanced by 0.9 percent. However, Japan's Nikkei 225 Index bucked the uptrend and dipped by 0.2 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has risen by 0.4 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.3 percent.

In the bond market, treasuries have climbed off their worst levels but continue to see modest weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.4 basis points at 2.555 percent.

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