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Stocks Close Firmly Positive On Upbeat Earnings News - U.S. Commentary

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Stocks did not see much follow-through on an initial upward move but remained mostly positive throughout the trading session on Friday. The gains on the day lifted the Nasdaq and the S&P 500 to their best closing levels in over six months.

Reflecting late-day strength, the major averages finished not far off their best levels of the session. The Dow jumped 269.25 points or 1 percent to 26,412.30, the Nasdaq rose 36.80 points or 0.5 percent to 7,984.16 and the S&P 500 advanced 19.09 points or 0.7 percent to 2,907.41.

For the week, the Nasdaq and the S&P 500 climbed by 0.6 percent and 0.5 percent, while the Dow edged down by less than a tenth of a percent.

The early strength on Wall Street came amid a positive reaction to quarterly results from JPMorgan Chase (JPM), with the financial giant jumping by 4.7 percent.

Before the start of trading, JPMorgan kicked off the earnings season by reporting record first quarter earnings and revenues that exceeded analyst estimates.

The better than expected results from JPMorgan partly offset some of the recent concerns about corporate results for the quarter.

Shares of Disney (DIS) also surged up by 11.5 percent after the entertainment giant initially priced its streaming service well below Netflix (NFLX).

Buying interest waned shortly after the start of trading, however, as traders seemed reluctant to make more significant moves ahead of the release of quarterly results from a slew of big-name companies next week.

A report from the Labor Department showing a bigger than expected increase in import prices in March may also have raised inflation concerns, although the price growth was largely due to another spike in fuel prices.

Meanwhile, the University of Michigan released a separate report showing consumer sentiment has deteriorated by more than anticipated in the month of April.

The preliminary report showed the consumer sentiment index dropped to 96.9 in April from the final March reading of 98.4. Economists had expected the index to edge down to 98.0.

Sector News

Natural gas stocks moved sharply higher on the day, driving the NYSE Arca Natural Gas Index up by 2.2 percent to a five-month closing high.

The strength in the sector came after oil and gas exploration and production company Anadarko Petroleum (APC) agreed to be acquired by energy giant Chevron (CVX) in a stock and cash transaction valued at $33 billion.

The upbeat earnings news from JPMorgan also contributed to significant strength among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index climbing by 1.9 percent and 1.7 percent, respectively.

Semiconductor, chemical, and networking stocks also saw considerable strength on the day, while some weakness emerged among biotechnology and healthcare stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan's Nikkei 225 Index advanced by 0.7 percent, while Hong Kong's Hang Seng Index edged up by 0.2 percent.

The major European markets also moved to the upside on the day. While the German DAX Index climbed by 0.5 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.3 percent.

In the bond market, treasuries moved notably lower over the course of the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced by 5.6 basis points to 2.560 percent.

Looking Ahead

Earnings news is likely to be in the spotlight next week, with Citigroup (C), Goldman Sachs (GS), Bank of America (BAC), Johnson & Johnson (JNJ), IBM (IBM), Morgan Stanley (MS), PepsiCo (PEP), and American Express (AXP) among the slew of companies due to report their quarterly results.

Traders are also likely to keep an eye on reports on industrial production, homebuilder confidence, retail sales, and housing starts along with the Federal Reserve's Beige Book.

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